Natural Gas Markets Continue to Power Higher

Natural Gas Technical Analysis

The natural gas markets have been pricing in the idea of Europeans buying US LNG going forward, but this is more of a longer-term story than anything else. In fact, there is no real way to know whether or not this happens. Because of this, the market is likely going to continue seeing a lot of noisy behavior and this will be especially true as we are so near the massive amount of resistance that we had seen previously.

Looking at this chart, you can see that the $5.50 level has been an area of interest recently, and therefore it is worth noting that it did hold as support. This of course is a very strong sign, so will see whether or not we can continue to push higher. I think sooner or later we run out of momentum, which will almost certainly be driven by whether or not Vladimir Putin holds fast to the idea of charging Russian rubles for natural gas. This has thrown a bit of disarray into the market because the Germans are pretending they will not capitulate.

That being said, we are a long way from next winter, so do not necessarily buy this and I think a lot of this is “panic buying” at the top. This does not necessarily mean that I would short the market quite yet, but I would need to see a structural break of the recent bounce in order to get short. At this point, I have found more opportunities in the crude oil market than in the natural gas market.

Natural Gas Technical Analysis Video 04.04.22

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