Natural Gas Forecast Today 19/9: Strong But Tired (Video)
Date
9/19/2024 3:00:16 PM
(MENAFN- Daily Forex)
The natural gas market initially did rally during the day on Wednesday but has seen a lot of noise right around the $2.60 level. This is not a huge surprise, as it was a level that's attracted a bit of action in the past. For the most part, we've seen three weeks of nonstop gains.
There have been numerous reasons for
Natural gas to rally, not the least of which of course would be the threat of hurricane damage in the Gulf of Mexico. Remember, this is a contract that you're trading that is specifically American. Furthermore though, Chinese demand for natural gas has picked up as they are converting a lot of the semi-trucks and auto buses and things like that on the mainland from crude oil to natural gas.
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So, perhaps that's part of what's been going on also. At the end of the day though, the biggest factor in this market is going to be the fact that we are heading toward autumn. This means that there will be more demand in the Northeastern part of the United States for natural gas in the coming months. Remember when you're trading in a CFD market, quite often they take the amalgamation of futures pricing, and therefore you are thinking out a couple of months ahead. The fact that we gave up the gains near the overbought condition on the relative strength index is not a huge surprise, nor would it be a huge surprise to see a little bit of a pullback. That being said, I do think that there are multiple areas of support underneath. The $2.40 level is an area I'm interested in, followed by the $2.35 level.
All things being equal, I do think that the market goes higher eventually, but it can't go straight up in the air forever. It looks a little tired and quite frankly, it should offer value on dips. Ultiamtely, this is the most important thing to think of.
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