Natural Gas Markets Continue to Power Higher

Natural Gas Technical Analysis

Natural gas markets continue to tear to the upside, as the situation between Germany and Russia continues to deteriorate. LNG exports out of the United States are thought to be a potential boon for Henry Hub gas, but at the end of the day, the Europeans can only take so much gas and converted it back to natural gas as needed.

With that being said, we are most certainly stretched, and again, I think unless you are already involved in this trade, you cannot get too cute with it. The market continues to be very volatile, but what I find interesting is that the volume is dropping again. Whether or not that means anything at this point is still open for debate, but we have clearly broken out above another barrier. The question now becomes whether or not the Europeans import enough natural gas to make that difference. We are starting to hear Germans talk about coal again, which would fly in the face of natural gas pricing. Part of this might be arbitrage as well, but quite frankly the demand should fall off of a cliff rather soon.

I do believe that there will still be a nice selling opportunity for a longer-term swing trade, but we have not had the setup quite yet. If you are a short-term trader that is based on momentum, this has been a great market for you but that is just not the way I trade. I tend to trade for bigger moves, and therefore a lot of patience will be needed. This is a seasonally weak time of year for natural gas, so sooner or later that may show itself as well. Currently, it looks as if the $5.50 level is your support.

Natural Gas Price Forecast Video 06.04.22

For a look at all of today’s economic events, check out our economic calendar.