Natural gas markets have gone back and forth during the course of the trading session on Tuesday as we are hanging around the 200-Day EMA.
Natural gas markets have initially rallied on Tuesday but gave back gains as we continue to hang around the 200-Day EMA. Ultimately, this is a market that I think given enough time will continue to see plenty of noisy behavior, and the recent explosions at the NordStrem 2 pipelines suggest that something else is going on as well. However, the markets have barely budged and I think people have finally come to the conclusion that the US-based contract has almost nothing to do with Europe.
There is a hurricane heading into the Gulf of Mexico right now, but quite frankly it looks like it’s going to miss anything of importance when it comes to the natural gas infrastructure. Because of this, I think you may have a little bit more negative pressure in the short-term, just because it will give us the opportunity to refill a lot of the storage capacity in the United States.
Furthermore, it is extraordinarily overextended during the last several months, so as we start to focus on the true fundamentals again, it will be interesting to see how natural gas plays out in the US contract. After all, we have seen far too much in the way of external noise, and now we can start to focus on demand in America. As things stand at the moment, demand is not that high and if we are going to start to see a global slowdown, it’s likely that demand for natural gas when it comes to industry will also be lacking going forward. I think rallies continue to get sold into.
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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.