Natural Gas Price Forecast – Natural Gas Markets Give Up Early Gains

Natural gas markets initially rallied during the trading session on Tuesday to test the $3.00 level again. That being said, the market ends up pulling back to form a little bit of a shooting star. This tells me that the market is likely to break down below the low made on Monday given enough time and I think it is more or less going to be a “grind lower.” After that, then we have the 50 day EMA coming into the picture at the $2.85 level, and then perhaps even a move towards the gap underneath which I still believe is the target.

NATGAS Video 26.05.21

With temperatures heating up in the United States, that drives down a lot of the demand for natural gas, + we are starting to see a little bit of lackluster behavior in commodities in general, as they may have gotten ahead of themselves. You can make an argument that perhaps natural gas got ahead of itself due to the fact that the markets were just starting to buy anything that was not a US dollar. Nonetheless, sooner or later supply and demand comes back into the picture and that of course is a very negative longer-term for this market. Yes, there is a certain amount of noise and behavior out there that causes volatility, but at the end of the day we are at the top of the cycle for the consolidation area, so I do think that we drop from here and go looking towards the bottom again over the next several months. I have no interest whatsoever in buying natural gas this time of year and simply look for the right set up.

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