Natural Gas Price Forecast – Natural Gas Continues to Drift a Bit

Christopher Lewis
Updated: Jun 19, 2024, 18:12 GMT+00:00

The natural gas market was slightly negative in the early hours of Wednesday, as we are still trying to come to a conclusion as to whether the market is going to be able to sustain the upward pressure in a time of year that it isn’t common to do so.

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Natural Gas Technical Analysis

Keep in mind that the natural gas markets were dealing with the Juneteenth holiday in the United States and therefore liquidity would have been a major issue in the futures market. However, there were a certain amount of buyers out there and sellers willing to get involved. So, with that being the case, I think you have a situation where it is probably at this point in time worth noting that on the four hour chart, we are in the midst of forming a rising wedge. I do think natural gas eventually falls because quite frankly, this is not the time of year that’s very positive for and under most circumstances.

Keep in mind that the heat wave in the United States was a major factor, and then of course we have issues in Europe as to whether or not they are going to have enough supply, but the hot weather at least is going to come out of the equation, and therefore I do think a correction is coming. In fact, you can see that if this pullback does in fact stick, we will have just made a lower high.

The $2.50 level is an area that I’d be interested in watching. And then again, the $2 level. I am long in this market via the ETF in the United States, the UNG ETF, but I don’t have a huge position and I certainly wouldn’t be levered to natural gas because this is a market that can jump quite wildly. And most retail traders just simply don’t have access to the kind of information that matters, plants opening, closing, output, input, pipes in the United States, transmission, whether or not storage is full or not, weather over the next week, which is always a bit of a question as well, and a whole litany of other geopolitical concerns.

It’s a very tough market. I don’t mind having exposure to it, I just don’t want to be highly levered. A pullback probably has me adding more to my position to take advantage of, maybe in the fall as temperatures start to get colder and we start to see winter over the horizon.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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