Natural Gas Price Outlook – Natural Gas Continues to Threaten a Massive Breakout

Natural Gas Technical Analysis

The natural gas market has pierced the $5 level during early trading on Thursday and now looks as if it is trying to figure out where to go next. I do think a little bit of a pullback would make a certain amount of sense because once you break above $5, you really enter no man’s land, and you could see natural gas go all the way to $7 before it’s said and done. This time of year is typically bullish for natural gas. So, I would like to see some type of pullback of about 50 cents to get involved. Or if we continue higher, then I need to see a pullback towards the $5 level and a balance to show acceptance of that price.

Seasonal Dynamics and Demand Factors

Natural gas, of course, again, is cyclical, and this time of year is typically very bullish for it. We are trading the January contract, and we’ve seen cold temperatures in the northeastern part of the United States as well as Canada. So, demand has really picked up. Whether or not that remains to be the case, well, we’ll just have to wait and see. But we do normally get some type of warming in the middle of winter, given enough time. And in that environment, you’ll see natural gas fall.

Over the longer term, though, I think there are a couple of months left in it. And then once we get to the spring contracts, then you’ll start to see a nice shorting opportunity. That’s the cycle that we find ourselves in yearly. There is talk about natural gas having a little bit higher floor now that we’ve got AI out there demanding so much energy, but I don’t really think that’s a thing quite yet. That’s more or less just a narrative.

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