Natural Gas Price Forecast – Natural Gas Rally Into the Weekend

In what is very much like a scene from Groundhog Day, we have another hurricane ripping through the Gulf of Mexico, and it is going to continue to see a lot of negativity due to this. That being said, I think it is only a matter of time before we break towards the $3.00 level, which of course is a large, round, psychologically significant figure. Keep in mind that the markets are also paying close attention to the fact that we are trading the November contract, which is typically a very bullish for natural gas as if the demand for heating will pick up.

NATGAS Video 12.10.20

To the downside, the market clearly has plenty of support levels at various spots. One particular area would be the $2.40 level, which is basically where the 50 day EMA is currently sitting. At this point, the market looks likely to continue to find buyers on dips, as there is obviously the trajectory of heat demand, followed by the fact that the US dollar is getting clobbered. In other words, a lot of the markets continue to rally based upon that fact alone. To the upside, if we can break above the $3.00 level, then we are likely to go much higher.

Ultimately, this is a market that I think is very cyclical and seasonal, so with that being the case, the markets will continue to be noisy and choppy, but buying the dips will work. Ultimately, this is a market that I think continues to see a lot of volatility but most certainly with an upward tilt.

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