Natural Gas Price Forecast Video for 12.07.23
Natural Gas Technical Analysis
Natural gas markets have rallied a bit during the trading session on Tuesday, as it looks like we are getting ready to go higher. The $3.00 level above is the top of the overall range that we have been in, and I do think that it makes a decent target. Keep in mind that we are in the midst of summer, which of course is a time that we typically see a lot of back and forth trading as the demand for natural gas tends to be very low. That being said, sometimes during the summertime in the northern hemisphere we can get heat waves that demand more natural gas for electricity.
That being said, the big driver for natural gas going forward is going to be the fact that the European Union now finds itself in the end, beholden to the Americans as the war in Ukraine has shut off natural gas flows from Russia. Furthermore, this is going to be a structural problem going forward after the sabotage to the Nordstream 2 pipeline.
While Norway tries to make up the difference, it will be nowhere near enough to replenish European natural gas stocks, and of course the Europeans just decided to shut down the Groningen gas fields, which were the largest ones in the European Union. The ability to shoot themselves in the foot has been quite impressive, and it leaves them looking toward the United States for liquefied natural gas, which is where the pricing of the most common natural gas contracts is in fact based on.
If we can break above the $3.00 level, then it’s possible that we could go looking to the 200-Day EMA, and if we can break above there, then it’s possible that we go looking to the $4.00 level. Between now and the end of summer, I think every time we pull back, there will be people willing to step in and take advantage of any type of value that appears. I think that the support runs all the way down to at least the $2.00 level, and for what it is worth, the ETF market is starting to show massive amounts of accumulation.
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