Natural Gas Price Forecast – Natural Gas Rises Early on Tuesday

Natural Gas Technical Analysis

The natural gas markets have rallied slightly during the trading session on Tuesday, as we are now threatening the 200-day EMA. The $3 level seems to be an area of interest for both buyers and sellers, and of course, we are trying to get out of this squeeze between the 50-day EMA and the 200-day EMA.

Seasonality

This is the time of year we start to see a little bit more positive momentum when it comes to natural gas. Heating demand will almost certainly pick up in the United States over the next several weeks. In fact, we are just now getting to the point where the nights are getting fairly cool, so demand should pick up. As demand picks up, price should rise over time, although it is worth noting that natural gas stocks in the United States right now are about 5% above the 5-year average.

Short-term pullbacks I do look at as potential buying opportunities at this point. I do not really have a whole lot of interest in shorting natural gas this time of year. I do think that we are building up the necessary momentum to finally take off to the upside.

It is not until the 28th that we roll over into the December contract. At that point, we really start to talk about people in the United States burning natural gas 24 hours a day. Until we get to that point, it is a little bit of a buy-the-dip opportunity, but it is also a market that probably has somewhat limited upside.

European LNG purchases this year could be a major story. We will just have to wait and see whether or not natural gas gets from Qatar to the EU. So far, it looks like that fear might be alleviated, but that is a wild card out there.

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