Natural Gas (NG) Forecast, Page 1

Natural gas begins the week at its lowest price level in almost three years. The catalysts behind last week’s steep break is increased shale output, coupled with mild spring weather. However, most of all the rapidly shrinking storage deficit is quickly alleviating fears over a potential supply crunch next winter.

Natural gas markets fell hard during the week, cracking through the $2.50 level on Thursday which was the last trading day of the week. Now that we are in this extreme area, this chart looks very sick.

The underlying natural gas futures were not open on Good Friday, but that doesn’t mean that we can’t take a look at the charts and glean some information going forward. As we roll through the Easter weekend, it’s easy to see that we are at a very important spot.

Production continues to rise driven by shale production

With prices headed toward the psychological $2.50 level, the major concern for short-sellers is not the bearish fundamentals, but the technically oversold conditions. The current mild shoulder season has pushed bullish traders to the sidelines as they await the summer cooling season. This being said, if $2.50 is taken out

Energy shares are weighed on by lower natural gas prices

Prices drop as inventories rise more than expected

Natural gas markets broke down during the trading session on Thursday, after the inventory report turned right back around to show signs of life. By doing so we are forming a bit of a hammer and that is important as it is right at a major bottom.

With prices headed toward the psychological $2.50 level, the major concern for short-sellers is not the bearish fundamentals, but the technically oversold conditions. This creates the potential for a “sell the rumor, buy the fact” situation.

Natural gas prices are oversold

Natural gas markets fell during the day on Wednesday, reaching towards the bottom of the support region that we have been paying attention to. Because of this, the next 24 hour should be rather interesting.

We’ve hit the time of the year when bullish traders will have to wait for the return of hot temperatures in order to generate any meaningful upside action.

Despite low levels of inventories prices continue to decline

Natural gas markets fell slightly during the trading session to open up Tuesday trading, but quite frankly we are still within a consolidation area that will continue to decide where the market goes next.

There is new evidence that the hedge funds are now short, having bet on weakness shortly after last Thursday’s government storage report.

Prices drop following Asian natural gas prices

Natural gas markets fell rather hard during the trading session on Monday, as we continue to see a lot of negativity. Overall, this is a market that looks likely to struggle, but we are at the very bottom of the longer-term consolidation area.

Downside momentum on the daily chart has put the June natural gas futures contract in a position to take out the last main bottom at $2.675. This will reaffirm the downtrend and put the market in a position to challenge the February 7 main bottom at $2.647, followed by the

June Natural Gas could continue to trade sideways-to-lower at the start of the week due to stable weather conditions and cash market weakness. If there is any volatility it will be fueled by a major shift in the weather forecast, or a major surprise in the weekly EIA storage report.

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