Natural Gas Price Forecast – Natural Gas Markets Soften To Start Week

The natural gas markets pulled back just a bit during the trading session on Monday as we continue to see the markets react to the $2.20 level. We are still in a downtrend, and quite frankly the fundamentals for natural gas or miserable. However, we are also at extraordinarily low levels.
Christopher Lewis
Natural Gas Price Forecast - Natural Gas Markets Soften To Start Week
Oil pipeline colored blurred background.

Natural gas markets pulled back just a bit during the trading session on Monday, as the $2.20 level continues offer a lot of interest. That being said, we are at extraordinarily low levels and are trying to bounce a bit. Having said all of that though, I still like the idea of shorting this market on signs of exhaustion after a bounce. The 50 day EMA is likely to cause resistance at the $2.32 level. Even if we break above there it, the market will then probably find significant resistance near the $2.40 level. Simply put, the natural gas markets have been a disaster this winter for anybody trying to be bullish, either trader or company, and this of course is going to continue to be a major problem.

NATGAS Video 14.01.20

The area between $2.20 and the $2.00 level, there should be plenty of support in that general vicinity. If we were to break down below the $2.00 level, it would be extraordinarily bearish. All things being equal, I look at bounces as an opportunity to take advantage of what is a strong downtrend. The Americans drilled 17% more natural gas in 2019 than they did in 2018, and then of course the winter has been very mild. The longer-term outlook for natural gas has changed drastically over the last couple of years, and therefore it’s likely that we will see natural gas continue to be a “sell on the rallies” type of market for years to come. This was very much like gold was in the 1980s.

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