Natural Gas Price Outlook – Natural Gas Continues to Look for Buyers

Natural Gas Technical Analysis

The natural gas market is trying to stabilize right around that crucial $4.00 level during the early hours on Wednesday, an area that has been discussed over the last couple of days. We do not have the V pattern yet, and we do not have the bounce, but we do see the first ingredient of that happening.

Because of this, and the fact that it is the January contract that is being traded, it is a situation where, as we get closer to the rollover into the February contract, which will be here in about 12 days, you should start to see more of a jump.

Seasonality and Weather Drive the Outlook

Natural gas is liked this time of year, and there is no interest whatsoever in shorting it, as it is one of the bigger cyclical trades. Colder temperatures are coming back to the United States, and they are not going away. With cold temperatures having come early this year, it is possible that the drawdown out of supply ends up being bigger than usual.

Because of this, the expectation is for prices to go higher from here, but there is not necessarily the momentum to jump in right now. Weather reports for places like Philadelphia, Boston, New York, Ottawa, Quebec City, Pittsburgh, and others are a huge driver of natural gas.

There was some excitement about the idea of powering AI data centers, but that is something for the future and not something for now. With that being said, the market is being watched for a bounce. If that does not play out, the $3.60 level is the next potential buying opportunity.

For a look at all of today’s economic events, check out our economic calendar.