Natural Gas Price Forecast – Natural Gas Continues to Look Soft

Natural Gas Technical Analysis

Natural gas markets have bounced slightly heading into the New York session, but quite frankly we have fallen off a cliff. Because of this, I think you’ve got a situation where the market is going to continue to see selling pressure after short-term rallies, and that does make a lot of sense considering that this time of year, you typically see a lot less in the way of demand for natural gas.

We had recently seen a massive shot higher, but a lot of that had to do with the heat wave in the United States, which has gone away, and we are now starting to see more common or normal temperatures. There were concerns about the European supply, but that seems to be abated, at least in the short term, and therefore, it makes a lot of sense that we go back to the average scenario. And the average scenario is that natural gas is a bit soft this time of year.

That being said, I do like owning natural gas and I do own it through an ETF. And that way I can avoid leverage. I just simply hang on to it for an investment. I’m interested in maybe buying a little bit of an ETF position in this general vicinity, but keep in mind, I’m thinking about selling in two to three months. This is not a short term trade.

I do get asked short term analysis all the time about natural gas, but the reality is, unless you know transmission, uh, rates in the United States through the lines, weather patterns in the Northeastern United States and a whole litany of geopolitical issues, you really don’t have much of a chance trying to figure out what the next day or two is going to be.

Granted, we could bounce to the $2.50 level and that would not surprise me at all. But I also think that could offer a little bit of resistance. Either way, this is a market that I think you need to build up a position. This is a swing trader’s market, not a scalper’s market.

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