Natural Gas Price Analysis – Natural Gas Continues to See a Bounce

Natural Gas Technical Analysis

The natural gas market jumped right off the bat on Wednesday as we are starting to see a little bit of a push to the upside.

The $3 level is an area that I think a lot of people are watching as it has a lot of psychology attached to it, but it’s also an area where I would anticipate a lot of options being traded. Keep in mind that we are rolling into the springtime in the United States and that will have a major demand destruction component to it as traders will be looking at the fact that people just won’t be needing as much heating.

Market Factors and Demand Outlook

That being said, we do have that component coming out of Europe as the Qatari production of natural gas has been turned off, so it does provide a little bit of lift for natural gas. That may not typically be there in this very US-centric market.

The market rallying from here I think gives you a selling opportunity on signs of exhaustion and therefore, I think if we do rally a bit from here, I think I am looking for like a long wick on the candlestick and I would love to short this market somewhere near the $3.50 level, but we’ll see whether or not I get that opportunity.

This is not Rotterdam gas, this is not the gas markets that are dealing with the bulk of the concern, although there will be a knock-on effect here. If you have the ability to trade natural gas, make sure you’re trading either spot or futures and understand the difference because the futures market right now is pricing in warm weather, which keeps it a little bit muted; spot markets might be a little higher because of the war, but at the end of the day, the natural gas futures market is the one that is most widely quoted.

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