Natural Gas price forecast – Hedgers are adding long positions

Natural Gas price Forecast - Generatebucks

Last week Natural Gas prices rallied around 3.3% and confident buyers entered the market. Natural Gas prices on Monday tried to rally but couldn’t take off and we saw a soft start to the week. This year has been a disaster for Natural gas producers.

Traders have been looking at basic weather models and seems like cold weather might enter US around 20 Jan. This might support the upside rally. Frankly speaking! Rally may not last long.

Short-term weather report

Based on the weather report released by that provides daily weather forecasts focused on the Nat gas industry, the demand for natural gas will be low to very low next week.

Looking at the weather forecast, very cold air will continue across the Northern Plains with highs of only -0s to 20s for locally strong demand. However, high pressure will dominate the South and East with much warmer vs normal temperatures as highs reach the upper 60s to 80s for Texas, South, and Southeast, 40s to 60s Mid-Atlantic Coast to most major Northeast cities. The West will see a mix of cold weather systems with mild breaks. Colder air will release across the upper Midwest and interior Northeast Thu-Fri for a minor increase in demand, but still light nationally.

Fundamental and technical

Prices declined yesterday but cold weather is expected in the last week of Jan. With cold weather forecast, we can expect a rally in coming weeks. The Natural gas prices could rally up to 165 to 170 on MCX.

Looking at charts, prices are trading at low and there is a support underneath but if warmer weather persist, we might not see any buyers.

For anyone bullish on Natural Gas, it is a complete disaster and a risky commodity. Most hedgers are looking to short.

The area underneath is a adding a huge support but if breakdown below 152 to 150 than Natural gas would turn bearish and traders might not see any rally.

Online trading tip –

Natural Gas has been a disaster this season for most buyers and producers. I would recommend to short Natural Gas on rallies and hold short term positions. Sticking to buying side is a complete NO NO. It will be a losing deal.

I expect a short rally to 160 -165 in coming weeks around end of Jan only if US gets more cold else prices might hover around 145 to 155.

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