Natural Gas Markets Continue to Pressure the Overall Range

Natural gas markets have rallied during the session on Wednesday to reach towards the $4.80 level before pulling back. At this point, we are getting close to another major area of resistance I think it is probably more likely than not that the sellers will come back. Yes, I am aware of the fact that there is a war going on in Ukraine, but this is a US contract, so any speculation here based upon that is of the possibility we will see the United States start exporting massive amounts of LNG. The problem with that concept is that we are still in the process of building a major export hub to do just that. Until it is open, LNG exports out of the United States will be somewhat limited.

NATGAS Video 03.03.22

Temperatures in the United States are starting to rise again, and that will wear on demand. Eventually, I would anticipate that the market goes looking towards the $4.30 level which is where the 50 Day EMA is, as it is a widely followed technical indicator. If we were to break down below there, then we would be looking at the 200 Day EMA next, currently residing at the $4.15 level.

On the upside, the $5.00 level above should be massive resistance, so I do not know that the market will be able to get above there easily. If we do break above there, it would obviously be a very bullish sign and could send natural gas looking towards the $5.50 level. That does not seem to be very likely at the moment though, and I think what you are going to continue to see is a lot of volatility more than anything else.

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