Natural Gas markets gapped lower to kick off the trading session on Monday, and then reached towards the structurally important $2.20 level. This is a very negative sign for natural gas markets, and quite frankly this winter has been a complete disaster. As Americans have drilled 17% more this year than last year as far as supply is concerned, and that of course has been disastrous for price. At this point, natural gas will be on its back foot until suppliers stop drilling. The fact that the high demand season can’t choose through the supply suggests that 2020 is going to be horrible.
NATGAS Video 24.12.19
At this point, breaking above the 50 day EMA would be a good sign, but quite frankly we haven’t been able to do that. We continued to gap lower, although we had a couple of gaps higher previously. The $2.20 level should be supportive, based upon the previous action but even at this point it looks as if it’s only a matter of time before breakdown. If we do, then it opens up the door to the $2.00 level. As a general rule I won’t sell natural gas this time a year, simply because there’s so much in the way of potential whether noise but it seems as if we can’t get through it, and therefore at this point you have to look for the potential winter spike as an opportunity to sell. I normally try to ride the winter spike up, but at this point it’s hard to do.
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This article was originally posted on FX Empire
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