Crude Oil and Natural Gas Price Forecasts – How They Benefit You

by Cynthia A. Kase Expert on Trading and Hedging

You have likely heard of crude oil and natural gas price forecasts, but chances are you aren’t convinced about the benefits of this type of service. However, in markets as volatile as energy commodities it is important to understand what the charts are telling you, determine market direction and strength, and to know where key support and resistance levels are in this short write-up, we shall take a look at some of the benefits that energy price forecasts actually offer you.
# Turns Data into Information
In a technology driven world we often tend to mistake data for information. If you search for crude oil or natural gas forecast on the Internet you would come across thousands of sources that offer you data on the price movements, fundamental factors, geopolitical influences, etc. However, do these reports help you make informed decisions? In most cases, the answer is no. Most of the information presented is speculation on how current fundamentals and other external factors may affect prices over the longer-term. Over time, fundamentals and other factors affecting prices change. Most of the time, these changes take place before the information is generally known. This is why price charts are so important. They reflect what the market knows about itself and the data on charts can be turned into valuable information that helps you make informed decisions.
# Judging The Strength of Trend
The art of making the right calls when dealing with energy commodities rests in judging the probable direction of the price. If you have a team of seasoned professionals who have expertise in crude oil or natural gas they may be able to get it right from time-to-time. But can they predict the strength of the move and whether the trend will continue? Possibly, but if they use an energy price forecast based on technical analysis they can make a better judgement.
For instance, if a trader comes across information that he believes will drive prices higher and he and enough others buy futures because of this information, prices will rise. The data on the chart shows the price rising, but it does not reflect why prices are rising. A trader that did not have that information might buy too late or miss the move altogether. However, an informed technical analyst can interpret that price movement, gauge its strength of trend, and determine whether odds favor a continued rise.
# Support and Resistance Levels
As a company that has been trading in natural gas and crude oil you are aware of the importance of knowing the support and resistance levels in energy commodities. If you compare these levels across different websites that offer you these insights, you would be alarmed at the kind of variation in their information. You can’t rely on such unaccountable sources while taking important decisions for your business. A reputable trading advisory agency would on the other hand offer you real data on support and resistance levels to help you maximize your trades and mitigate risk.
Summary
In this article we see how natural gas price forecasts and crude oil price forecasts can benefit your trading decisions and help mitigate risk.