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Natural Gas Price Forecast – Natural Gas Markets Find Support At Same Place

Christopher Lewis

Natural gas markets have sliced through the $2.20 level but turned around to show signs of support again. That’s an area that has been important more than once, so at this point in time it makes quite a bit of sense that we would see buyers support and defend this area again. The $2.20 level needs to hold if there is any hope whatsoever of a bounce. That being said though, the market is likely to be one that you can fade on rallies more than anything else, which is something that I have never said during the wintertime.

NATGAS Video 26.12.19

There typically is some type of spike during the winter, and you can in general take advantage of that. Signs of exhaustion after a huge rally will more than likely be jumped upon in order to profit, as the Americans drilled 17% more this past year than they did the year before. Ultimately, we simply cannot chew through the supply, which sets up for a horrific year 2020. Granted, we will get that winter spike sooner or later, but it will be relatively short-lived, because we are already at Christmas time and the demand has not taken over the supply significantly enough to send prices high enough to make it an attractive market for suppliers. Next year is going to be very difficult for the suppliers so the real trade might be to short natural gas suppliers in the stock markets. Having said that though, natural gas may bounce but I think by the time we were to get to the $2.31 level you should probably be out of any long position.

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This article was originally posted on FX Empire

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