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Natural Gas Price Forecast – Natural Gas Markets Pulled Back Slightly

By:
Christopher Lewis
Published: May 22, 2023, 15:24 GMT+00:00

Natural gas markets have pulled back slightly during the session on Monday, as we continue to see a bit of a return to consolidation.

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In this article:

Natural Gas Price Forecast Video for 23.05.23

Natural Gas Technical Analysis

Natural gas markets have fallen a bit during the trading session on Monday, as we continue to see a little bit of hesitation, as the market is more likely than not going to continue to look at the $2.00 level underneath and the $3.00 level above as the outer reaches of the consolidation area, and perhaps even is going to define the overall “summer range” that we often see. After all, natural gas markets tend to be rather quiet in these times, as demand will drop due to the lack of heating demand coming out of the northern hemisphere. Furthermore, if we have a global slowdown, that will obviously put a huge hit on the demand for natural gas by industry and electrical production. Either way, this is a time year that you would not expect a lot of bullish behavior.

Having said that, the market was so oversold that it does make a certain amount of sense that we have seen a bit of a recovery. Whether or not we can break down below the $2.00 level remains to be seen, but even if we do, it’s likely that the market will find support near the $1.80 level. In other words, I would look at it more or less as a “support zone.” On the upside, if we were to take out the $3.00 level, then it’s possible that the market could go looking toward the 200-Day EMA, which presently sits at the $4.00 level. I’m not necessarily looking for that to happen in the short term, but it is a possibility if we get some type of heat wave in the United States or Europe.

Later this year, I would fully anticipate that the Europeans will have to replenish their natural gas storage units, and therefore I do believe that eventually this becomes a very bullish trade. In the short term though, I think we are simply in the process of building a longer term base, which coincides quite nicely with the consolidation area and time of year anyway. Because of this, I remain relatively neutral on natural gas, recognizing that it’s going to be difficult for this market to break down too much further.

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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