Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

Natural Gas Price Forecast

I recently posted that natural gas prices looked unlikely to drop much further but I didn't make any predictions. People like predictions, they are entertaining and make for an interesting topic of conversation.

It is important to give YOUR predictions a reality check on a regular basis. It is OK to be wrong. It never hurts to consider the opinions and research of others but if you are making decisions you need to develop some investable scenarios that you can test over time. Valerie Wood outlines the factors that go into natural gas pricing forecasts.

Since I can't be an expert on every type of industry that I invest in, I tend to base most of my decisions on technical analysis. I prefer to have an understanding of fundamentals to bolster my choices but ultimately I defer to what the market tells me as opposed to my research. The more research I do on a subject the more invested I become in my predictions so slapping a few lines on a chart keeps me from holding on to incorrect opinions for too long.

Natural Gas Price Chart Posted by Hello

My prediction is that natural gas prices will bottom at ~US$5 within the next 60 days and reach a high of US$9-10 within the next 6-12 months.

My inputs to my prediction are the parallel green and red lines on the price chart. A move below US$5 or above $US10 would be a big deal to technical analysists (Much like oil above $US40 or gold above $US400 - note the price behavior around these important technical levels).

Here are some articles discussing natural gas price fundamentals.

NRG News
Bill Powers

Not Advice
Courtesy the Big Picture Speculator