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Natural Gas Price Forecast – Gaps Higher Due to Winter Storm

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Christopher Lewis
·1 min read
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Natural gas markets gapped higher to kick off the week as much of the pipelines in the central part of the United States are frozen shut. That being said, it is somewhat irrelevant from a longer-term standpoint and should only offer a nice selling opportunity above. This is because temperatures are almost certainly going to be rising in the next few weeks in America, which of course is the biggest consumer of the commodity. This time of year, the northern part of the United States normally gets hit one more time with a major storm, just to let you know that winter happened. Now that we are getting through this, temperatures will start to warm up, thereby driving down demand massively.

NATGAS Video 16.02.21

The market certainly has a significant amount of support near the $2.80 level, so at the first signs of exhaustion that is where I am going to be looking to aim for. Because of this, I am simply waiting for an opportunity to start selling natural gas yet again. If we can break down below the 50 day EMA, it will almost certainly open up the road to the $2.50 level. As far as how much further to the upside we can go in the short term, I suspect that the $3.20 level will be very difficult to overcome, assuming we even get there. I believe that the troubles with the frozen gas lines would have a much bigger effect if this were happening in December, and not at the end of winter.

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This article was originally posted on FX Empire

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