Natural Gas Weekly Technical Analysis
The natural gas market has been all over the place during the trading week as we continue to see the area right around the $4 level causing quite a bit of havoc at this point. Given enough time, I do think that this is a situation where ultimately, we will have some type of resolution to the back and forth. But right now, I think there are so many different crosswinds going on that traders really don’t know what to do.
For example, I believe that the temperatures dropping in the United States are bearish, of course, because it’ll bring down demand. But at the same time, you can make an argument that the Europeans may be importing more natural gas from the United States. Remember, watch what Europe does, not what it says. They’ve been buying Russian natural gas during the entirety of the Ukrainian War until recently, and in fact, have sent more money to Russia than Ukraine. So, numbers don’t lie, people do.
So, in that sense, it’ll be interesting to see if they actually drop Russian gas. And if they do, that will keep this contract somewhat elevated because, of course, it’s a US contract. On the other hand, there is a very serious concern about a potential global recession. And if that’s the case, one would assume that demand would drop there as well. So, we’re all over the place as far as different factors that could make this market move. And as a result, we’re just hanging around $4. I lean more to the downside, I’ve made no secret of this, but we just don’t have any momentum. I think the $4.50 level seems to be acting as a pretty significant resistance barrier as well.
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