Natural Gas Price Outlook – Natural Gas Struggles Slightly in Early Thursday

Natural Gas Technical Analysis

The natural gas market initially tried to rally here on Thursday but has given back a little bit of the gains as we are finding the previous uptrend line offering a bit of resistance. We are also hanging around the 200 day EMA, which of course is an indicator that a lot of people will pay close attention to. It is relatively flat right along with the 50 day EMA. So that suggests that we are very much in a range, which I think is pretty obvious since the beginning of May as we haven’t really been able to pick a direction for any significant amount of time.

Nonetheless, this is a market that I think still has a lot of overhead pressure based on the seasonality and the fact that demand is probably going to be dropping. Heating demand is dropping in North America, but there is the nuance this year that’s a little bit different in the sense that the Europeans are importing more US gas.

There are also questions about whether or not Russian gas will ever come back online on the continent. And this may, in the future at least, open up the possibility of higher prices in the off season, if you will, making natural gas extraordinarily supported. That being said, we also have to think about AI and electricity and things like that. So longer term, we may see a little bit of a change in the way the market works at this time of year.

Regardless, and thinking well past all of that, I look at this as a market that you’re still fading rallies in, at least for a couple of months. If we were to break above the previous uptrend line, then we could go looking to the $3.75 level and then possibly $4, which is the top of the overall range. On the downside, the $3.20 level is a potential target. After that, we could look at the $3 level. We’re essentially in the middle of the range, but it does look like we’re getting a bit tired, so I think more downward than upward pressure is present.

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