Natural Gas Price Forecast – Natural Gas Continues to Drop

Natural Gas Technical Analysis

The natural gas markets have continued to fall during the early hours on Tuesday. And it looks as if the $2.35 level is a short-term support area that we will have to pay attention to. Quite frankly, we are falling off of a cliff here and I think it’s something that is to be expected. This time of year, is typically very negative for natural gas anyway. And the major reason we shot higher was due to a heat wave in the United States, which has passed. There were concerns about a tropical storm or hurricane, depending on how it progressed through the Gulf of Mexico attacking certain refineries, but that has passed as well.

So, at this point, we just have the demand part coming into the picture, and typically this time of year, demand is low. So, I would expect that we would continue to go lower. The $2 level would be an excellent entry point, and at this juncture, I do have a small ETF position on, but I don’t over-lever natural gas.

It’s a great way to blow up your account by doing so the natural gas markets typically are very cyclical and therefore I think as we get later into the summer and we start thinking about fall, then we could see higher pricing. But right now, not so much. I think this was a bit of an anomaly and I do think we continue to drift lower over the next several weeks, although an occasional bounce would be expected along the way.

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