Natural Gas Markets Likely to Pull Back

Natural gas markets have gapped just a bit lower during the course of the trading session on Thursday as the market continues to be a volatile one to say the least. Obviously, we have to worry about the situation on the Ukrainian border, as there is a certain amount of geopolitical risk, but at the end of the day, this is a US contract, so it will have limited effect more than anything else. Furthermore, a lot of what we had seen during the session on Wednesday was due to a storm coming, to the northeastern part of the United States. That is a temporary phenomenon, and it certainly looks as if we are now going to return to the idea of less demand in the future.

NATGAS Video 18.02.22

To the upside, if we were to break out above the top of the candlestick for the trading session on Thursday, that could send the market looking towards the $5.00 level, a psychologically important figure that will attract a lot of attention. Because of this, I think it still remains a “sell on the dips” type of situation. Warmer temperatures are coming and that will drive down pricing to say the least. Ultimately, this is a market that I am a seller of it and have no interest in buying. Because of this, and simply waiting for signs of exhaustion that I can sell into, something that it looks like we may be getting by the end of the day. I believe that the market could go looking towards the $4.25 level without too much in the way of concern, possibly even down to the $3.50 level.

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