Natural Gas Price Forecast – Natural Gas Markets Continue to Drift Lower

Natural Gas Price Forecast Video for 05.05.23

Natural Gas Technical Analysis

Natural gas markets drifted lower again during the trading session on Thursday. After all, the natural gas markets continue to favor the downside, as there is a huge concern around the world when it comes to energy demand, and unlike crude oil, there is no cartel to manipulate the natural gas market as we may have seen earlier in the session when it comes to the oil markets. In other words, although natural gas is difficult to trade at times, it is a much “purer” trade.

The $2.00 level underneath continues to be important, and I think the large, round, psychologically significant figure will almost certainly continue to play havoc with market psychology. If we do break down below there, I think there’s plenty of support near the 1.80 level, so I think of this more or less as a “zone of buyers.” On the upside, it’s a completely different argument, because we have the 50-Day EMA right around the $2.50 level, and then after that we have the psychologically important $3.00 level.

Ultimately, this is a market that will probably stay in this overall range, and it does make a certain amount of sense due to the fact that this time of year typically has quite a bit of negativity in the natural gas markets occurring, due to a lack of heating demand. Furthermore, it might be worth noting that industrial demand for natural gas is going to continue to be a question, due to the fact that a slowing global economy will have a major influence on whether or not electricity demand picks up. Remember, natural gas is a major component of electrical production, and if industry is slowing down around the world, then obviously that will have a negative influence on pricing.

That being said, you can make a strong argument for the market trying to kill time for the next couple months, before having to refill the European natural gas tanks, as the war in Ukraine is nowhere near being done. In other words, it may be quiet for a couple of months, but I anticipate that as we head into the fall for the northern hemisphere, it’s likely that this could be an excellent swing trade.

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