Natural Gas Price Outlook – Natural Gas Continues to See Range

Natural Gas Technical Analysis

The natural gas markets have gapped lower to kick off the trading session here on Monday, showing signs of weakness as we are now testing the 200-day EMA as well. The 200-day EMA is obviously an important technical indicator that a lot of people follow, so it’s not a huge surprise to see that we are just hanging out here. Given enough time though, I do believe this is a market that will try its best to break down towards the $3 level.

This time of year is typically pretty negative for natural gas, but it’s also worth noting that there is a little bit of a different scenario this year than many others in the sense that the Europeans are importing more US gas now than pretty much ever. So, with that, it does skew this contract a little bit as it is a US based contract.

The Americans of course have always exported to Europe, but the Europeans also got a huge chunk of their natural gas from Russia, which obviously is not happening at the moment. Increased Asian demand also puts a little bit of pressure to the upside on pricing, but the U.S. has more than enough natural gas for the entire world. And Canadian gas that sometimes gets rounded through this contract as well has even more.

So, with all of that being said, I’m only typically bullish on natural gas in cold months in the Northern Hemisphere. We are not in one of those cold months. So, although we’ve been somewhat resilient, I think maybe we found our range for the next couple of months, somewhere between $3 and $4. So, it does make sense that we would sell off at this time of year with less demand and go looking towards the bottom of the overall range.

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