Natural Gas price forecast – Oversupplied market unable to gain momentum

Past few weeks have been quite bearish for Natural Gas prices. This year seems to be a disaster for Natural Gas suppliers due to oversupplied market and warmer temperatures.

Natural Gas price
Natural Gas Production - Generatebucks
During the trading session on Tuesday, Natural Gas markets fell slightly. Traders’ sentiments are quite bearish and it is easy to say at this point, that we might hardly see any rallies unless sustained cold weather hits America.

Short term Weather forecast

Based on the Natgasweather, the weather forecast for this week suggest rain and snow showers in the East today with highs of 30s to 50s for stronger demand. The central and southern US will be mild the next few days with highs mostly in the 40s to 60s, but then warming late week with 50s to 70s gaining increasing for light demand. The West will see a mix of mild and cool areas with only local showers. Strong high pressure will build back over the East late in the week with temperatures again warming well above normal and into the 40s to 70s. Overall, moderate national demand Tue-Wed, then back to very light Thur-Sun, averaging out to LOW.
Clearly fundamental for the natural gas prices push them towards red zone.

Supply situation

There is an abundance of natural gas as Americans have drilled 17% more this past year than they did the previous one. With this supply situation, prices struggle to gain any momentum. It is highly unlikely that we could see a significant rally this season.

Natural Gas prices forecast

Looking at current fundamentals, I would, quite frankly, suggest staying away from the market until we see any rally. We are trading in an oversold zone and with dull fundamentals, prices are expected to decline. We might see a rally in coming days but that might only trigger more short positions.
For any reasonable trade, one should wait for a rally before they enter this market. It is sensible to create a short position at small rallies for short term. Holding any bullish position in this market will not be advisable.

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