Natural Gas Price Analysis – Natural Gas Tests $3.00 as 50-Day EMA Holds Resistance

Natural Gas Technical Analysis

The natural gas market has rallied a bit during the early part of the trading session here on Thursday to reach towards the crucial and psychologically important $3 level. The $3 level, of course, will attract a lot of headlines and is backed up by the 50-day EMA, which is an indicator that a lot of people watch very closely.

Breaking above the 50-day EMA opens up the possibility of a move to the 200-day EMA, which is closer to the $3.22 level. That being said, market participants like the idea of certainty, and right now there isn’t much. Until the situation in the Middle East clears up, it will be difficult to be confident about energy markets.

European LNG Demand and Supply Disruption Risks

When you look at this market from a historical standpoint, typically this is a very poor time of year, but we do have a different question this year as we start to head out of the August contract and start thinking about September. That will be whether or not the Europeans have to import natural gas from the United States.

European natural gas prices are spiking, and if there is a disruption in supply from Qatar, you’ll see it here in the Henry Hub contract as well. US demand for natural gas isn’t so much a thing at the moment. The temperatures are fairly mild, and of course it’s busy season is in the winter. But having said that, we are starting to try to reach a little bit higher. The natural proclivity this time of year, though, seems to be traders being a bit more bearish, so I do keep that in mind.

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