Natural Gas Price Forecast – Natural Gas Takes Off due to Storm

Natural gas markets have spiked after initially gapping higher on Tuesday. This is due to the massive storm that is currently pounding the central part of the United States, freezing up pipes and delivery of energy from multiple sources. That being said, it is only a matter of time before the storm ends, and then we will have a potential massive selloff as soon as supply comes back online. After all, natural gas does tend to trade on the most recent weather news, which makes it a very volatile market to say the least.

The $3.20 level has offered a little bit of resistance, and then the next area I would anticipate that we would see significant resistance would be closer to the $3.40 level. Quite frankly, I hope this market screams to the upside because I will be looking to sell it once we get a nice sign of exhaustion. The warmer temperatures coming in the next few weeks should be a major driver for prices to go much lower, and I will be heavily short of natural gas markets.

Currently, the set up just is not there and of course this freak storm has only exacerbated the fact that the market is somewhat thin at the moment. I look at this as a simple short-term momentum play, one that I do not want to be involved in because it will almost certainly end rather abruptly. Just waiting for the right opportunity is what this comes down to, and at this point I think you may have a few more days of waiting.