Natural Gas Weekly Price Forecast – Natural Gas Markets Continue to Grind Higher

Natural gas markets have shot higher during the course of the trading week, to break towards the $3.80 level. At this point, the market then turned around to wipe out about half the gains as the natural gas markets may have gotten a little bit ahead of themselves. Nonetheless, we have recently broken above the top of a significant resistance which can be found at the $3.40 handle. The $3.40 handle should now be your “floor the market” going forward, as long as we can hold that level. When you look at the previous consolidation area between the $2.40 level and the $3.40 level, the “measured move” suggests that we could be going to $4.40 over the longer term.

NATGAS Video 05.07.21

That being said, part of what has caused this major breakout is the heat wave in the western United States which is starting to fall off, so that could also help. Nonetheless, this is a market that I would not be short of until we close well below the $3.40 level, as it could end up being a bit of a “throw over” in that situation. As far as supply and demand is concerned, obviously the demand is much higher than the supply at the moment, but longer-term natural gas is going to have a continued problem with the fact that there is simply far too much of it out there for the market to chew through all of the available supply, although that is more of a longer-term cyclical issue than the short term whether or inflation related plays that we are currently going through.

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