Natural Gas Weekly Price Forecast – Press Space Natural Gas Markets Continue Lower GrindNatural gas markets have fallen again during the week after initially gapping higher. This shows just how weak the natural gas market is still, and that continues to be the main theme.
Natural gas markets have initially tried to rally during the week, but then broke down to reach towards the $1.80 level again. This is an area that continues to be massive support, but looking back five years, we have been lower, and it looks as if the market is going to try to continue to reach towards that level.
All things being equal, the market is likely to see sellers commit every time this market tries to rally, especially near the psychologically important $2.00 level. Furthermore, the $2.20 level is also resistant, especially considering that on the daily chart there is a 50 day EMA sloping lower, showing signs of weakness. However, the real resistance to natural gas is the massive oversupply that the market continues to see. Because of this, it’s likely that we will continue to see sellers come in every time the market does rally due to weather in the United States. As the Americans have drilled 17% more this last year than they did the previous year, in what was already in oversupplied market, natural gas is going to continue to have a lot of heavy pressure upon it. However, there is hope coming down the road.
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The Hopi natural gas is that there will be a lot of bankruptcies when it comes to drillers. We have already seen hundreds of smaller companies go under, and a larger companies are starting to be downgraded when it comes to credit worthiness. Because of this, the market is likely to continue to see further bankruptcies, thereby bringing down supply. However, that is probably a story for 2021. This year should continue to be plenty of “sell the rallies” type of opportunities just waiting to happen.