Natural Gas Price Forecast – Will Natural Gas Ever Find a Bottom?

Christopher Lewis
Published: Feb 14, 2024, 13:56 GMT+00:00

At this point in time, it is like a broken record, natural gas continues to look weak, and quite frankly nothing seems to be picking the market up.

Natural Gas tanks, FX Empire

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Natural Gas Price Forecast Video for 15-02-2024

Natural Gas Technical Analysis

The natural gas market is trying to stabilize early during the trading session on Wednesday, but quite frankly, it just cannot get out of its own way. The last time I saw a market sell off like this, it was Bitcoin. So now we are treating this commodity much like a cryptocurrency, it appears and now we are looking for the bottom. The question now, of course, is going to be, where is the bottom? The $1.50 level is a very likely candidate, and I think there is a lot of noise between here and there. So, it’ll be interesting to see whether or not we get some type of bounce. There is a nor’easter heading to the northeastern part of the United States this weekend, which is supposed to dump a ton of snow.

However, I don’t think that traders at this point in time really care because this is a market that’s been left for dead. And if that’s going to be the case, it’s going to be a very long year for natural gas traders. We eventually will form some type of range for the year, but right now it looks like we’re still trying to find the bottom. Eventually we stabilize and then we go searching for the top.

This is a market that is oversold beyond belief. And I think at this point in time, it will be very difficult to see any reason to jump in. You know, I could have said multiple times in the past that this is a good area to perhaps find a bit of value and in fact have, and yet we continue to fall. Eventually, natural gas does have to stop falling. Otherwise, it becomes free. And I don’t think too many producers are going to be happy with that. So, pay attention to rig counts. Rig counts are not dropping yet, and that is continuing to cause problems.

The Americans are just flooding the world with natural gas right now, and it’s gotten to the point where most economies can’t burn enough. Speaking of burning natural gas, it is worth noting that here in the United States, we burn it off of our oil rigs because we have so much in the ground. That’s why natural gas is at best a volatile short-term trading instrument.

The winter was a complete bust. It just wasn’t cold enough, and this is the result. At this point, you probably need to see something on the weekly chart to suggest when it’s time to buy for maybe a short-term trade. Selling down at this level, though, is reckless because really, at this point in time, how much further can it really go? The risk of reward doesn’t work out in your favor.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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