Natural Gas Weekly Price Outlook – Natural Gas Has a Bullish Week

Natural Gas Weekly Technical Analysis

The natural gas market had a strong week, as there are several different things going on that have traders pushing for short-term gains. The first one, course, is the heat wave in the Eastern part of the United States that is expected for basically the next five days or so, which should drive up natural gas demand to produce electricity for air conditioning.

That of course is understandable, but it is also a very short term thing. And in fact, on Friday, it almost looks like we’re already starting to roll back over. The little bit more pressing issue, of course, is going to be the fact that natural gas will be produced in Iran, especially if those fields get bombed as the war goes on. And you will have to worry about perhaps the Chinese stepping into the open markets and buying natural gas, thereby driving up demand.

We’ll wait and see because remember, this is a US contract. It’s not global per se, although there are a lot of exports coming out of Henry, Louisiana. The reality is the market is much more sensitive to weather in the United States, all things being equal. Of course, not all things are equal right now and there are a lot of extraneous circumstances. So, with this being said, I still favor the market at a lower price, but I think the longer term trader might have to drop down to the daily chart to get the short entry. If we break above the top of the candlestick for the week, then $4.50 could be your next target. Generally speaking, though, this time of year, we do tend to soften up and you can see that we haven’t invalidated the idea of a massive head and shoulders pattern either. So, this is a market worth watching.

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