Natural Gas Price Forecast – Natural Gas Continues to Pressure Ceiling

Natural Gas Technical Analysis

The natural gas market pulled back just a bit during the early hours on Thursday as we continue to slam up against the $2.50 level. It’s interesting how we’re behaving because quite frankly, it looks like a lot of people are starting to join the trade where China buys much more natural gas for its large rigs and buses and less petroleum. But we also have to keep in mind that natural gas production in the United States right now is being threatened by a hurricane. We’ll have to wait and see whether or not that does anything, but that has put a little bit of an upward tilt in this market.

If we can continue to go higher and clear the $2.50 level rather easily, then we have the possibility of natural gas going all the way to the $3 level. I do think this is a market that continues to be very noisy, but I also recognize that it is a market that can be very dangerous at times as well. This is why I choose to use an ETF position and not a heavily levered position, because you can have your account destroyed rather quickly on some errant weather report.

So, with that being said, I do think this is buy on the dip behavior, but I don’t necessarily think you need to get aggressive with it. I would not be a seller, but if we were to break down below the $2.20 level, then you start to have questions again. This time of year, is typically bullish for natural gas as we start to prepare for winter. And that of course is probably the biggest driver of all.

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