Natural Gas price forecast – Is it time to exit your short position

Being a seasonal commodity, Natural Gas prices has been directly following weather. November and December are usually volatile for Natural Gas future prices. Last week Natural Gas prices tried to fill the gap underneath and we saw a gap down opening while this week started with a different forecast for Natural Gas prices. 

Natural Gas price Chart - Generatebucks
Natural Gas price Chart - Generatebucks

Traders are anxiously waiting for colder weather to enter US but there has been no significant shift. 

Short-term weather report


According to the natural gas weather report , demand will increase early this week as a cold shot with rain and snow sweeps across the northern and central US, coldest across the Midwest and Northeast w/lows of -10s to 20s. It will be warm Monday from S. Texas to the Southeast with highs of upper 60s to 80s for light demand, but cooling Tue-Thu as a cold front pushes through. Reinforcing cool air will continue across the Northeast late in the week w/highs of 20s to 40s, while the rest of the country is expected to warm above normal w/highs of 40s to 70s. Overall, demand increasing to HIGH Tue-Thu, then back to MODERATE or LOW this weekend into next week.

Natural Gas storage report


The EIA report released last week showed that domestic supplies of natural as fell by 73 billion cubic feet for the week-ending December 6.

Natural gas price forecast


There has to be a significant change in the weather forecast for traders to start looking to buy Natural Gas. Traders are waiting for mid-day forecast to release that could provide a clear picture for buyers and sellers. 

Hedgers are still aiming to short at any given rallies due to unfavorable weather conditions. With less demand and huge supply issues, Natural Gas prices are unable to hold to any support. 

Today Natural Gas prices rallied but with no change in demand, it will be difficult for prices to hold a bullish trend. 

Trading tip 


Intraday traders should buy NG at 166 for target of 169 with stop loss of 164. Positional traders should wait for midday forecast. Prices would trade from 160 to 180 until US gets extremely cold weather shots.

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