Natural Gas Price Outlook – Natural Gas Continues to See Supporters

Natural Gas Technical Analysis

Natural gas jumped during early trading on Wednesday in what I would assume would be very thin volume. Ultimately, this is a market that is going to pay close attention to weather, and we, of course, are in the dead of winter here in the United States and, of course, over in Europe. That should drive up demand, and as a result, this time of year tends to be cyclically very positive, and traders tend to go long the market whenever they can.

Now, having said that, we had recently seen a massive selloff because we had gotten far too ahead of ourselves, and, of course, the displacement of natural gas from storage wasn’t as great as people had anticipated. So at this point, we have to watch the weather.

Watching the Weather Technical Analysis

Right now, the weather next week in the United States is supposed to get fairly cold, and therefore, demand for natural gas should pick up, thereby driving prices higher. We have certainly seen that play out over the last 36 hours, but we’re also in holiday trading conditions, so volume, of course, will be an issue as well.

Ultimately, I do think we get back to the $5 level, I just don’t know how long it takes. It could be very sudden, it could be more of a grind, but either way, I do think that’s a magnet for price because we are getting ready to roll over on Monday into a new contract, which might be part of the noise that you’re seeing here as well. Keep in mind that contract, January, is typically very bullish anyway, so I’m pretty bullish on this market.

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