Natural Gas Price Forecast – Natural Gas Continues to Look Volatile

Christopher Lewis
Published: Jun 18, 2024, 14:14 GMT+00:00

The natural gas markets have rallied a bit in the early hours of Tuesday, as the market continues to try to price in the hot weather in the United States. Because of this, I think volatility isn’t going anywhere, and caution is advised.

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Natural Gas Technical Analysis

Natural gas markets have rallied early during the trading session on Tuesday, as the United States continues to deal with a massive heat wave. However, this is a temporary situation, and I do think you need to be very cautious about jumping all in at this point. This is a market that given enough time, we’ll have to sort out the fact that supply is still something that there is plenty of.

And as a result, I just don’t see how you feel comfortable hanging on to natural gas for a big move. But that’s part of the deal with natural gas. It’s not necessarily something that traders use for anything more than a quick smash and grab trade for most of the time. This is mainly due to the fact that natural gas is highly sensitive to the latest weather patterns in the Northeastern United States and therefore subject to massive fluctuations.

I do think that small positions are reasonable this time of year, especially if you are building up for the fall when temperatures will start to drop again in the United States, and demand will almost certainly pick up. In that environment, it becomes more of an investment, and that’s fine. There’s nothing wrong with investing in natural gas. I tend to do it through an ETF. I just don’t play the leverage game, because quite frankly, it can wipe out your account rather quickly. With that being the case, I have a ETF position, but if you are trading contracts for difference markets, you can do it in smaller increments.

I do think at this point in time we’re going to at least try to get to the highs at the $3 level, but whether or not we can break through remains an open question. I prefer to buy dips. I’d like to see it move down to $2.50 at least to start adding to my position. Right now, I’m just simply sitting on it.

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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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