Natural Gas Price Forecast – Natural Gas Markets Getting Parabolic

Natural gas markets have rallied significantly during the course of the trading session on Tuesday as we continue to see a bit of a parabolic move in this market. Quite frankly, the heat wave in the Western part of the United States is driving up demand for natural gas, and it should continue to see price is rising as a result. With this, I think it is only a matter of time before we run out of steam though, especially if the heatwave slows down. That being said, the market is likely to see a lot of bullish pressure overall, but it is overdone at the moment.

NATGAS Video 30.06.21

Underneath, I see the $3.40 level as a potential floor the market, especially as it was such a significant point of break out. Based upon the measured move of the consolidation area that we had just escaped from, we could see this market going towards the $4.40 level, but that obviously a longer-term call. That being said, you should keep in mind that natural gas is cyclically and structurally oversupplied, and this is not typically the time of year where demand soars. Because of this, if we do see a pullback in the commodity markets overall, it is very likely that natural gas will be the first place it appears.

Keep in mind that a lot of what we are seeing here is simply a “knock on effect” from other commodities, and the possibility of a shrinking US dollar. (It should be noted that the US dollar has actually gotten stronger of the last couple of days, but in the longer term since it has been falling.)

For a look at all of today’s economic events, check out our economic calendar.