Natural Gas Price Analysis – Natural Gas Continues to Bump Along the Bottom?

Natural Gas Technical Analysis

The natural gas market is very choppy in early Tuesday trading as we continue to scrape along the bottom. The war, of course, has had a lot of influence on what people think natural gas will do, but what they don’t understand is that this is a US contract. There is plenty of natural gas in the market, and that won’t be changing anytime soon.

Domestic Supply and Demand Dynamics

It looks very hesitant to try to rally. That does make a certain amount of sense considering that demand for natural gas in the United States will fall off of a cliff over the next several months. I still believe that this is a market that you are selling at the first signs of exhaustion if we do rally and I think that’s what we’re looking forward to shorting.

The 50-day EMA is at the $3.33 level and dropping, and I think that is a little bit of a ceiling. If we were to break above there, then the $3.50 level is a ceiling as well. I don’t think we break above there, but if we did, obviously, I’d have to step back and let the market do its thing.

This time of year, though, I think anytime we jump 20 to 30 cents, you have to be looking for an opportunity to get short yet again. Next winter I think natural gas is a little higher than usual because the Europeans will almost certainly be importing more. As things stand right now, the demand just doesn’t warrant a major explosion to the upside despite the fact of what’s going on in Qatar.

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