Natural Gas Price Outlook – Natural Gas Bounces After Gap Higher

Natural Gas Technical Analysis

The natural gas market has gapped higher to kick off the trading session on Wednesday and looks to grind to the upside. We are in an area that has been important due to the fact that it was the bottom of a gap that kicked off the trading of the December contract. Now we have filled that gap, and technically speaking, we are looking to bounce.

This time of year, of course, is very cold in the northeastern part of the United States, one of the biggest consumers of natural gas, so pay attention to the weather reports as it looks like colder temperatures are in fact coming down the road.

Market Drivers and Supply Dynamics

That is exactly what natural gas will need because, of course, it is a supply and demand issue here. There was a lot of hype previously about natural gas due to a colder part of the beginning of winter than usual, and of course, the idea that the AI data centers would demand a massive amount of power. That being said, that’s not a right now problem, and as a result, the market got way ahead of itself.

With this, we’ll be paying attention to the 200-day EMA currently sitting at $3.63 and then, after that, looking at the possibility of going to the $4 level. Short-term pullbacks continue to be buying opportunities, but I would not get overly aggressive in this market because natural gas can become extraordinarily violent at times, and of course, you have to worry about the storage numbers. While I do believe in the upside this time of year, I also recognize that natural gas should be a small part of your portfolio, not the main focus.

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