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Natural Gas Price Forecast – Natural Gas Markets Drop to end the Week

Christopher Lewis
·2 min read

Natural gas markets have dropped quite a bit during the trading session on Friday after initially trying to rally. Quite frankly, even though we have the “polar vortex” coming to the northeastern part of the United States in the short term, the reality is that demand will not be anywhere near enough to drive down the supply that is one of the biggest problems. With that being the case, it is very unlikely that we will be able to sustain any type of rally. At this point, I think we are going to go looking towards the 200 day EMA, and then possibly down to the $2.30 level. I think that at this point we continue to see this as a market that is somewhat range bound with more of a negative bias, but eventually the warmer temperatures are going to overwhelm anything along the lines of bullish pressure.

NATGAS Video 01.02.21

To the upside, the $2.80 level looks to be a massive resistance barrier, so I do not think that we are able to get above it anytime soon. If we did, then we have to contend with a gap at the $3.00 level, which quite frankly I think is about as high as this market could even dream about going. With this, I think that what we are looking at is a scenario where we simply fade rallies going forward and wait for the market to plunge down to the $2.30 level, followed by the $2.00 level eventually. We are running out of winter, and therefore running out of cold temperatures to try to shrink supply. The cyclical trade should be running to the downside fairly soon.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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