Natural Gas Price Forecast – Natural Gas Continues to Drift Lower

Natural Gas Technical Analysis

The natural gas markets fell a bit during the early hours on Thursday as we continue to see the weight of gravity come into the picture. After all, natural gas had shot straight up in the air for a while, so it’s probably not much of a stretch at this point to think that perhaps we need to pull back. And at this juncture, I’m paying special attention to the $2.85 level, which has been important a couple of times in the past. This is an area that could cause a bit of support, so I’ll be waiting to see if we get a bounce that I can buy into.

On the other hand, if we break down below the $2.85 level, we could drop all the way down to the $2.50 level where I think value hunters will be interested. Remember, we’re starting to price in the idea of winter in the Northeastern part of the United States, which of course will drive up demand for natural gas as it is one of the most common ways to heat a home. And on top of that, the futures contracts are looking out a couple of months ahead.

Ultimately, I think this is a market that will be very noisy, but that’s nothing new. And of course, we have to focus on the fact that we’ve had a couple of hurricanes blow through and disrupt some of the production in the Gulf of Mexico. So that is factored in as well. As far as the market is concerned, I think what we are seeing here is just some simple profit taking as we have reached the three dollars, twenty cents level and now have dropped 30 cents after touching that region. This is a relatively calm and orderly pullback, which leads me to believe that there will be buyers on this dip.

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