Oil & Gas - Energy - Commodities - Resources (OILBRENT)

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Natural Gas Markets Spiked for the Week
By: Christopher Lewis | October 1, 2021

• Natural gas markets rallied quite significantly during the course of the week, reaching towards $6.50 before pulling back quite sharply. By doing so, it looks like we are going to pull back from here.

Natural gas markets have spiked higher to kick off the week, reaching all the way towards the $6.50 level. By reaching that area, we got a little bit overextended, and then pulled back quite significantly to reach down towards the $5.50 level towards the end of the Friday session. All things been equal, this is a bit of a shooting star, but at this point I still think we are a long way away from forming a new downtrend. Quite frankly, it is very likely that we would see buyers on dips, and that is exactly how I plan on playing this market.

I believe that the $5.00 level should continue to offer a significant amount of support, at least from a psychological standpoint, if not a structural one. There is still a significant amount of demand for natural gas in the European Union, and as long as that is going to be the case, I think it is difficult to short this market. The market is significantly bullish, and therefore it is going to take a significant amount of a fundamental shift in order to make this market fall apart.

That being the case, I would be short and probably aggressively so, but until demand suddenly falls apart, there is no way to do that. As to where we end up to the upside, it is almost impossible to tell, but it should be noted that the momentum is still there, so I think that we will continue to see plenty of value hunters looking to pick up natural gas.

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