Natural Gas Price Forecast – Natural Gas Continues to See a Lot of Pressure

Natural Gas Technical Analysis

The natural gas markets have drifted a little bit lower during the trading session on Friday as we continue to see a lot of negativity and weakness in this market. Recently, the market reached the $3 region again, only to turn around and show signs of weakness. That does make a certain amount of sense, considering that we got through the hurricane season and hurricanes of the last couple of weeks fairly well, and production is still intact.

So, with all of that being said, the natural gas supply is still there. However, we are heading into the coldest time of year, and that typically will bring in a certain amount of demand. That’s essentially what we’re pricing right now. So, the real question is whether or not we can break above the $3.20 level, which has been like a massive barrier. If we do, then it becomes more of a run higher. Otherwise, we may have just peaked. A lot of this comes down to the weekly weather reports in the United States, and specifically something like 10 states.

So, with that being the case, I think you have to be very cautious with this market. I previously had been long of natural gas via ETFs, which of course mitigates a lot of the leverage risk that you might have with a CFD. Or you could do so with a small position. Short-term pullbacks and pullbacks like we’ve seen in the last week or two are potential buying opportunities, but you cannot put a lot of your money into this market. It’s a great way to lose it. So, with this volatility, I would be looking at the 50-day EMA underneath as a potential support level for a short-term trade to the upside. Otherwise, not a lot is going on here.

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