Natural Gas Booms as Crude Oil Drops

The natural gas price rose by 7.79% on Monday, reaching $1.978 and prompting predictions of even further price increases.

The price of gas has been increasing for days, but it was the Monday spike that showed the price could be headed up further. There was a spike on Friday as well, just before trading closed, and that prepared the gas price for a positive opening on Monday.

The momentum did not drain over the weekend, and the price continues to increase as the week begins. The last month has been inconsistent, with a major decline early on in February. By the last half of the month, indicators were looking good that the price would increase, and we have seen a mostly bullish trend in the natural gas price since then.

Crude oil is down today, with Brent Crude down 0.38% and Crude Oil Continuous Contract dropping 0.7%.

Tensions in the Middle East are still high, but the US is trying to negotiate a ceasefire between Hamas and Palestine. Even with the trouble in oil-rich areas, the prices continue to increase.

Price Forecast for Natural Gas

The price will likely shoot past $2.00 very soon and could move higher in the next few days. Expect remarks from the Fed chairman on Wednesday to cause some movement in the market. Much of the natural gas market is being influenced by oversupply and low demand for gas, though. That will limit how far the price can move.

While we expect the price to increase in the fall as winter season is gearing up, a larger range of factors will affect where the price keeps moving up before then. There is potential for the price to increase but it will likely hit a ceiling well before the $2.50 mark. As long as supply is high and demand is limited, the price will have a hard time getting very far past the $2 level. A new resistance level of $2.15 may develop over the next few weeks.