Natural Gas Price Forecast – Natural Gas Markets Reach Towards Gap

Natural gas markets shot higher to kick off the trading session on Tuesday to reach towards the $3.00 level, a large, round, psychologically significant figure, and an area where we have seen a massive gap. Ultimately, the fact that we have seen a massive storm coming to the northeastern part of the United States does drive up the idea of demand, but quite frankly it is a market that is oversupplied and will continue to be so. The market has a certain amount of support near the $2.80 level now that we are broken through, and if we break down below there then we will collapse.

NATGAS Video 03.02.21

We are approaching the end of winter, so there is no real reason to get excited about natural gas at this juncture and with that being the case I think that what we are looking at is a potential for a nice selling opportunity as we head towards the warmer temperatures. We are already trading the March contract, so I think that rallies will continue to find serious skepticism. The 200 day EMA is now near the $2.50 level, and I do think that we probably get down there as well. I do believe this point in time we will continue to see more of a “fade the rallies” attitude, although the recent shock of course has caused a little bit of a shot higher. I look at this as a gift to start selling yet again, and perhaps drive down towards the $2.00 level longer-term. We are not getting there overnight, but clearly that is where I believe the market will try to get to.

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