Natural Gas Weekly Price Forecast – Natural Gas Continues to Build a Base

Natural Gas Weekly Technical Analysis

We continue to meander around the bottom in this market. I believe that natural gas is in the midst of a base building pattern, but this could take the better part of three months, maybe even longer than that. The main reason being is the market is extraordinarily cyclical, and this is typically the weakest time of year, we might get the occasional last ditch winter storm in the United States, or maybe we get a heat wave in the middle of summer that could drive up natural gas demand, but as things stand right now, we have plenty of supply out there. And quite frankly, we’re at the point where drillers are starting to discuss walking away from the field.

That could cause a bit of upward pressure later this year, but there is so much natural gas and storage that the only way to play this from the long side, and I am doing just that, is through an ETF and just ignore it for a while. It’s just something that is going to be able to be bought into and then cashed out later this year, possibly even as late as November. So, keep that in mind.

Short-term trading is almost non-existent. Long-term trading is going to have to be investing because eventually things will turn around. As drillers step away, they will plunge supply, but we’re nowhere near that right now. There are still a lot of companies out there doing everything they can to hang on. I think a good move later this year might be to the $3 level.

We’ll see, I’m not expecting anything above that, but again, I am invested through ETFs, so the day-to-day fluctuations really don’t affect me, and that’s the only way you can stay in this market, unless you have a tiny CFD position, but make sure you pay attention to any rollover charges at the end of each session.

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