Natural Gas Price Forecast – Natural Gas Markets Run Into Brick Wall

The natural gas markets initially shot higher during the day on Friday, but as you can see the $2.00 level has offered a significant amount of resistance, and therefore we ended up forming a bit of a shooting star that shows just how resilient this large figure is. That being said, there is also plenty of support underneath, especially at the 50 day EMA. Once we break down below there, then the market has to deal with a massive gap. While gaps do get filled eventually, it could be very choppy on the way back down there. I think we do have a little bit of negativity ahead of us, but longer-term of starting to think that this May be the beginning of the market trying to turn around.

NATGAS Video 04.05.20

Fundamentally, I cannot make a huge argument for natural gas to go much higher other than the fact that a lot of companies out there are probably going to go under. That will help drive down the oversupply eventually, so the market is probably trying to get out ahead of that. That being said, if we are in fact trying to turn the trend around, this is normally a long-term affair. Notice how the markets went back and forth in very choppy behavior since February, extending down toward the bottom of March, and then now has made a higher high. This is a noisy and brining pattern, and quite often that is how trends change over the longer term. Do not get me wrong, I am not ready to start plowing into natural gas contracts quite yet, but this is something to be aware of as we do get a short-term pullback, but you cannot necessarily expect the market to turn on a dime.