Natural Gas Weekly Price Forecast – NG Bounce After Filling the Gap

Natural gas markets have fallen initially during the course of the week, filling the gap from a couple of weeks ago. Now that we have done that and recovered to break above the three points or zero dollars level, it is likely that the market is ready to go much higher. Ultimately, this is a market that I think does test the highs given enough time but that does not mean that is going to be easy. Natural gas is of course a very volatile asset, as it is a relatively thin market.

NATGAS Video 16.11.20

However, when we look at the cyclicality of this market, I think that it is only a matter of time before we go higher. After all, colder temperatures are coming to the northern hemisphere, and therefore demand will pick up quite drastically. We are trading the December contract right now and getting ready to roll over into the January contract. That is typically bullish, but by the time we start talking about trading a couple months now, we will start looking at the spring contracts, which of course means less demand.

We still have another leg or two higher, and as that is the case, I am looking for buying opportunities. However, I believe at this point in time it is a short-term trade, measuring in a few weeks or couple of months at best. All things being equal, this is a market that is oversupplied but ultimately this is the wrong time to be shorting.

For a look at all of today’s economic events, check out our economic calendar.