Natural Gas Price Analysis – Natural Gas Continues to Drift Sideways

Natural Gas Technical Analysis

The natural gas market has been very quiet in the early part of the trading session on Friday as we’re hanging around the $3.00 level. I do think this is a market that eventually does drop.

Any short-term rally at this point in time that shows signs of hesitation, I think, will end up being a nice selling opportunity. I believe that this market will continue to look at the 200-day EMA above as a major barrier, and I’d be really surprised to break above there.

Key Support and Demand Factors

The market breaking down below the 50-day EMA opens up the possibility of a drop down to the $2.60 level. All things being equal, you have to keep in mind that this is a market that has a serious lack of demand at the moment. We did get a little bit of a hot couple of days in the United States that boosted things, but I think we fall right back down from here, and that does make quite a bit of sense.

Ultimately, natural gas, I think again, goes down to the $2.60 level. Later this summer, we’ll have another pop due to a heatwave, but we’re nowhere near that right now. What will be interesting is this winter, when the Europeans may have to step in and start buying a lot out of the United States, that will have a major influence on this market.

But as things stand right now, pretty calm, cool, and collected. I think we continue to see downward pressure. I don’t think it’s a meltdown, I just think there’s a serious lack of energy demand here.

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