Natural Gas Price Forecast – Natural Gas Rallies on Heat Wave

Natural Gas Technical Analysis

Natural gas continues to take off to the upside as we are looking at a hotter than anticipated end of June in the United States, and that could really send this market much higher. That being said, it looks like we are going to attack the $3 level and breaking above there opens up the possibility of much higher pricing. This is typically not a very strong time of year for natural gas, but we also have to worry about supply issues in Europe. In fact, French household gas prices are getting set to rise about 12%, according to the French regulators.

At this point in time, I think we have a situation where traders continue to come in and buy short-term dips, at least for the time being. But keep in mind, this is also the type of rally that could collapse rather quickly, at least from the United States point of view. All things being equal, if the Europeans continue to struggle with supply though, they will have to come to the US for more gas, and that will push this contract to the upside.

The four hour chart looks very strong. We gapped higher to kick off the weekend. We’re just taking off from there. With this, we are up over 3% for the day and we haven’t even started the open outcry portion of the futures market. So it’ll be interesting to see how this plays out. I do think we are going to give $3 a real challenge. If we can break above there, that opens up a whole new battlefield for this market. Clearly this is a bullish market. You do not want to short anytime soon.

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