Natural Gas Price Analysis – Natural Gas Continues to Trade in a Tight Range

Natural Gas Technical Analysis

The natural gas market has gone back and forth during the trading session in the early part of Friday as we sit between the 50-day EMA below and the 200-day EMA above. Furthermore, we are sitting just above the $3 level, which, of course, is a large psychologically important number and an area that I would imagine a lot of option barriers live.

Supply, Demand, and Inventory Outlook

Ultimately, one of the biggest problems that you have with the natural gas market right now is that it’s hard to see a lot of demand with the temperatures becoming a little milder in the United States, and therefore, it’s not even a situation where you have to worry about air conditioning demand. Heating, of course, is all but not a thing at this time of year, as most of what we are looking at here is going to be based on the United States. Later this year, we will see a lot of demand coming out of Europe, but as things stand right now, the demand just isn’t enough to take out the supply.

It’s also worth noting that on Thursday, the inventory numbers in the United States ended up being larger than anticipated, which, of course, is bearish; that’s part of what caused the sell-off on Thursday. Ultimately, I think in the short term we will probably see a lot of back-and-forth trading. This is probably a market that short-term scalpers probably prefer at the moment as it is quiet.

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