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Natural Gas Price Forecast – Natural Gas Continues to Look Volatile

By:
Christopher Lewis
Published: May 21, 2024, 13:48 GMT+00:00

The natural gas market continues to see a lot of noise, as we continue to try to determine whether or not we can sustain this pressure.

In this article:

Natural Gas Technical Analysis

You can see right off the bat here on the four hour chart, we’ve seen some pretty negative action. That shouldn’t be a huge surprise because quite frankly, we’ve gone straight up there. The question is whether or not this a little bit right around $2.50 holds.

I hope it doesn’t. Quite frankly because I could be a buyer at lower prices. Natural gas, of course, has gone straight up in the air for the last several weeks, and sooner or later it is going to have to take a bit of a breather. It’s a bit of a odd market, really. I think one of the biggest problems that the traders have with it is you don’t always know the contract that you’re CFD is based on.

Most are based on the Henry Hub, Louisiana contract, meaning you’re trading US weather. And as somebody who lives in the northeastern part of the United States, I can assure you the weather is not stable. So therefore, you get these massive moves. There are also concerns about natural gas supply in Europe, again. So that means that they may be coming over to Louisiana to pick up their gas.

And it just remains to be seen. But we also have geopolitical concerns and everything else to worry about. Quite frankly, this is a market that’s overextended. So, for myself, I sold off some of my ETF position a couple of days ago, willing to buy in again down here, taking the leverage out. Natural gas is not something you want a lot of leverage in, because a sudden spike in temperature in the summertime can cause something like this, just as the markets can completely collapse, like we’ve seen a couple of times over the last couple of years.

So, protect your account. If you’re going to trade natural gas, do so with a low leverage. Use an ETF if you have the ability. If not, then a small CFD position should suffice because quite frankly, this is a market that can just rocket in either direction. I’m looking for support underneath to add to my position in the ETF and take advantage of what should be a longer term move, but we could see a move all the way down to $2, and I would still be very interested.

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

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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