Natural Gas Price Forecast – natural gas markets slump

Natural gas markets fell a bit during the day on Friday in an attempt to break down below the 20 day EMA. We have in fact done that, and it now looks likely that we will go looking to fill the gap underneath, somewhere near the $3.00 level. I think at this point rallies are still to be sold, as natural gas is well oversupplied. Granted, we have cold weather coming to the United States it will increase demand but this is going to be for short-term only. We are only a couple of weeks away from flipping the calendar in the futures market over to the spring season, and that of course is very bearish for natural gas as heating will no longer be an issue.

NATGAS Video 21.01.19

The $3.50 level above is major resistance, so I think breaking above there would be rather difficult to do, but it would open the door to the $4.00 level. I look for short-term rallies to start selling as the oversupply of natural gas is not only an issue now, but I believe it is a structural problem longer term as well. Ultimately, this is a market that I think will continue to be volatile, but clearly we have more sellers out there over the longer-term than buyers. I have no interest in buying natural gas, because at this point the United States by itself could supply the world with 300 years’ worth of natural gas. It just simply is too over abundant to ask for high prices for any length of time.