Natural Gas Price Forecast – natural gas markets gap lower to kick off week

Natural gas markets initially gapped lower to kick off the week, reaching down towards the $4.00 level. While we do have cold temperatures coming to the United States and of course the seasonality that goes along with this market will continue to help the buyers. However, we had gotten far ahead of ourselves and I now think we are essentially trading in a range bound market between the $4.00 level, and the $5.00 level above. Looking at the chart, I think it’s likely that we will continue to go back and forth, but longer-term we will eventually start trading Spring contracts, which will drive the value of natural gas down.

NATGAS Video 27.11.18

I think volatility is something you can probably count on, so think of the outer ranges of this market as essentially the boundaries of where we should trade. However, if we break down below the $4.00 level, then we could go down to the $3.75 level next, and perhaps even the 50 day EMA just below there. I certainly think that will happen eventually, but we are probably several weeks away from that type of trading. In the short term, I like fading rallies as it looks like we have gotten so far ahead of ourselves that we may have already printed the highs for the winter months near the $5.00 level. Patience will be needed but I think that plenty of supply is coming online due to the higher pricing.