Natural Gas Price Forecast – Natural Gas Continues to See Pressures

Natural Gas Technical Analysis

The natural gas market has fallen a bit during the course of the trading session on Tuesday as it looks like we could drop down to the $2.20 level. All things being equal, this is a market that I think continues to be very noisy, but we are getting closer to an area where we may see value hunters coming in, but I don’t want to get overly aggressive. Keep in mind, natural gas is almost always volatile anyway. And of course there is a cyclical trade setting up. And what I mean by that is we have the colder temperatures coming in the fall, and that should drive prices higher. I don’t know if we’re quite ready to do that run higher yet.

So, on dips, I’ve been buying ETF positions, adding to a position that I’ve had for a while. And I plan on taking advantage of that once we finally do get that inevitable surge. That being said, it’s a very small part of my portfolio because quite frankly, only suckers trade natural gas with any leverage. There almost nobody I’ve ever met can do it correctly because it’s based on weather patterns. And unless you have the latest meteorological models built into your trading system, you really have a lot of problems.

The reason I think we’re seeing such negativity during the Tuesday session of course, is there’s a slowing energy demand around the world, including China. It doesn’t bode well for energy overall, but natural gas will get that boost due to cold weather in the Northeastern part of the United States. But I don’t know how high it goes over the winter. I just wait for a nice surge, and I take my profit and then I ignore natural gas for months. That’s really the only way I’ve found success in this market.

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