Natural Gas Price Forecast – Natural Gas Continues to See Headwinds

Natural Gas Technical Analysis

The natural gas markets initially tried to rally a bit during the day on Tuesday but has fallen yet again as we look like we are ready to drift towards the $2 level. Quite frankly, natural gas is a market that is very weak. And I think given enough time, we could drop to the $2 level due to the fact that it is a large round psychologically significant figure and an area where we have seen a lot of support previously. All things being equal, this is a market that is waiting for the demand season to pick back up, which is typically autumn and more specifically winter in North America.

The demand for natural gas just isn’t strong enough this time of year to really get the market moving for a longer term move. I’ve been buying natural gas with non-levered positions in something to the effect of ETFs, or if you don’t have the ability to do that, then you could go looking at the CFD markets. Really at this point in time, I think you’ve got a situation where you need to be very cautious about your position sizing because this is a very volatile market. You don’t want to be levered.

However, once we get that spike later this year, I’ll just collect my profit, generally about a double of what I buy it at and call it quits. It’s only a few percentage of my portfolio. I don’t make this a big trade. That being said, if we were to turn around and break above the $2.27 level, that could send this market towards the $2.35 level in the short term, but right now, it certainly looks like we’re drifting lower.

For a look at all of today’s economic events, check out our economic calendar.