Natural Gas Price Forecast – Natural Gas Markets Gap Lower

Natural Gas Price Forecast Video for 27.04.23

Natural Gas Technical Analysis

Natural gas markets have fallen again during the trading session on Wednesday, as we continue to see a lot of negativity in general. Remember, a lot of what had sent natural gas markets higher was fear coming out of Europe after the Russian/Ukrainian war started. Furthermore, Nordstream II was blown up, thereby cutting off gas to Germany. There were serious concerns about whether or not the European Union would be able to make it through the winter as far as heating was concerned.

Since then, the Freeport LNG terminal has been repaired in Texas, allowing the United States to export massive amounts of natural gas. We also have the northern hemisphere heading into a warmer time of year, and this is typically a very cyclically weak time of year for natural gas anyway. Add to that the fact that the global economy seems to be slowing down, which should, in theory, drive down the demand for natural gas overall as it is a major source of electrical power.

Looking at the chart, it’s obvious that we are in a bit of a trading range, with the $2.00 level underneath offering a significant amount of support, and the $3.00 level above offering significant resistance. Another thing to remember is that the 50-Day EMA is sitting just above, and is driving lower, perhaps putting even more downward pressure on natural gas. While it is very unlikely that natural gas collapses from here, the reality is that it is much easier to sell the contract than it is to buy it at this point.

That being said, there will come a time soon that traders will jump in and start buying natural gas because there will be a lot of value hunting. Sooner or later, we start to focus on cooler temperatures, and we may get the occasional heat wave this summer for the northern hemisphere that could send this market higher. Until the end of the summertime, those spikes should end up being nice selling opportunities. Even if we break down below the $2.00 level, the downside is probably somewhat limited, with a 1.80 level also being an area where you would expect to see a certain amount of support.

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