Natural Gas Price Analysis – Natural Gas Jumps into Resistance Level

Natural Gas Technical Analysis

The natural gas market gapped higher to kick off the Monday trading session as Asian traders just pushed anything related to energy straight through the stratosphere, but we’ve seen quite a bit of pushback here. That does make a certain amount of sense.

The G7 countries are now talking about releasing crude oil from their reserves, and that takes a lot of pressure off natural gas, as natural gas won’t necessarily be burned in larger quantities due to trying to make up for the energy shortfall.

Market Momentum and Export Pricing

Furthermore, the natural gas market is looking very much like one that is starting to try to price in the idea of a lot of foreign exports coming out of the United States and into places like the European Union. There probably is a little bit of a premium to be paid for this, but ultimately, at the end of the day, it’s the wrong time of year to worry about it significantly as the heating bonus of pricing isn’t out there.

Of course, we also have to keep in mind that the disruption in natural gas might be temporary, we don’t know, it’s not necessarily a structural thing yet. But what’s interesting is that we saw a lot of momentum screaming all the way to the $3.50 level, an area that also has the 50-day EMA and the 200-day EMA and is also an area that’s been very noisy in the past.

I’ve actually mentioned $3.50 by name, so we are in an area where we might start seeing a little bit of shorting on the first signs of weakness. We’re already starting to see that. It’s worth noting that oil markets have also pulled back, so I think maybe the markets have got a little bit spooked and now they’re starting to rethink these things. This time of year, I just don’t like buying natural gas.