Natural Price Forecast – Natural Gas Continues to Bounce From Bottom

Christopher Lewis
Published: Apr 1, 2024, 14:11 GMT+00:00

The natural gas markets continue to see a lot of noise at the bottom of the overall market pricing, as we have seen so much in the way of support in this area, and drillers may be tempted to simply walk away at these levels.

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Natural Gas Technical Analysis

And as I’ve been saying for a while, we’re just kind of bumping along the bottom. And this big move in the early hours on Monday doesn’t change anything. It just suggests that we are going to continue to see people look at this as a potential value play. It does make a lot of sense because when you zoom out on long-term charts, the $1.50 level has been a hard floor.

Furthermore, it’s probably worth noting that the natural gas markets continue to languish overall due to oversupply, but we are getting to the point where drillers are just simply going to walk away from the fields. There’s no point in going to work only to lose money.

We will more likely than not continue to see a lot of noise and I think that the best way to deal with this is through a non-levered position or a very low levered position. In the case of myself, I’m in an ETF and I will just simply hold onto this through the year, and it will eventually bounce from this extraordinarily low price. And when it does, I’ll collect my profits. I can use it as part of my portfolio. It’s not a trading vehicle and that gas is just too noisy. It’s based on the weather report in the next couple of days in places like Boston. And unless you live in the United States, it’s very difficult to get that information in a timely manner. Even when you do live in the United States, it’s very difficult to get ahead of the pit traders as it were. So, with that being the case, it becomes an investment and it’s one I’m fine holding.

We have formed a bit of a double bottom, but I don’t know what’s going to send it higher. Will it be a heat wave in the summertime? Would it be the last vestiges of winter, which sometimes can show up in early April? I don’t know, but what I do know is that sooner or later, natural gas will have to rise. It can’t go to zero. And at this point in time, I just have it as a percentage of my portfolio. I’ll have some alarm set if it crosses $2, maybe $2.50, then I start to look, should I take some profit, buy on the dip again, who knows? It’ll just come down to the reasoning that’s going on. At the moment, there are geopolitical concerns about supply as well, eventually coming to light, maybe. If things heat up in the Middle East, we’ll have to wait and see. But at this point, it’s just a simple longer-term investment.

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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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