Natural Gas Price Forecast – Natural Gas Continues to Grind Away

Natural Gas Price Forecast Video for 26.07.23

Natural Gas Technical Analysis

Natural gas markets have rallied just a bit during the trading session on Tuesday, as we continue to hover above the 50-Day EMA. Keep in mind that we are in the midst of some type of bottoming pattern, and therefore I think it makes quite a bit of sense that we would see more sideways action, especially considering that this time of year is typically very quiet for the natural gas markets as the northern hemisphere has a lot less in the way of demand.

Another thing that people will be paying close attention to is the idea of whether or not there will be a lot of industrial demand, because we are possibly heading to recession globally, that of course will drive down demand for electricity. With that being said, you also have to pay attention to the fact that natural gas is typically more bullish in the winter, as it is used to heat homes. However, if we get some type of heat wave in the United States, that could cause demand to pick up a bit.

Ultimately, the big driver will be the Europeans and their need to replace the natural gas supply in that part of the world, as the war in Ukraine is nowhere near ending. As long as that war drags on, the Europeans will have to head to the United States to look for liquefied natural gas. This is a very expensive way to do it, but it is going to have a direct correlation on the price of natural gas, as the futures contracts are derived from US suppliers.

If we can break higher, the $3.00 level will be an area that traders will be paying close attention to, because not only is a large, round, psychologically significant figure, but it’s also an area where you would probably see options barriers. With that being the case, I like the idea of building a position now, and starting to add to it once we break out of the $3.00 level. I recognize that this is a slow and painful type of trade, but it continues to build up pressure for a nice investment opportunity.

For a look at all of today’s economic events, check out our economic calendar.