Natural Gas Price Forecast – natural gas markets chop

Natural gas markets did rally a bit after initially falling during the day on Thursday, but as you can see we are in the middle of consolidation. The 50 day EMA is just above and starting to turn lower. The $4.00 level above offers major resistance, and I think it will be difficult for the market break above there. I look for the first signs of weakness start selling because we are suddenly so bearish. The recent move has been brutal, and I think at this point it’s likely that the sellers will return time and time again, especially near the 50 day EMA.

NATGAS Video 24.12.18

If we break down below the $3.50 level, it’s likely to send this market down to the $3.25 level. Ultimately, this is a market that is starting to come to the realization that it had gotten way ahead of itself, and we are starting to trade warmer months, or at least the end of the winter in the United States, which generally brings the value of natural gas lower overall. I think at this point, the $3.00 level is the longer-term target, but it’s going to take some time to get there. I don’t necessarily think that we break down below there, but overall this is a market that had gotten way ahead of itself, and with the milder winter in the United States, it doesn’t take much to imagine that we are going to get a huge build of supply rather soon.