Natural Gas Weekly Price Outlook – NatGas Continues to Drift Lower

Natural Gas Weekly Technical Analysis

The natural gas market initially tried to rally during the week, but it seems like the area above the $3.50 level continues to offer significant resistance and we have since plummeted down to the 50 week EMA. It does make a certain amount of sense that you would see a lot of questions asked of this market right now as this time of year typically you see a lot less in the way of demand.

Now, keep in mind that Friday was Good Friday, and therefore, futures markets were closed. So really what you’re looking at here is a four day candlestick, but nonetheless, I think this is a situation where the $3.50 level will continue to be an area that you need to pay close attention to. I think it does continue to be a little bit of a ceiling in this market.

Breaking down below the 50-week EMA opens up the possibility of a move down to the $3 level, and this is something that I do expect to see sooner rather than later. Anything under $3 then has natural gas falling apart. At this time of year, simply put, heating demand drops and therefore demand for natural gas drops.

Furthermore, we have concerns about recession and therefore electricity demand could drop as well. Ultimately, this is a market that I think will continue to look a bit, a bit soft, maybe a bit lacking at the moment. If we do broke above the $3.50 level, I’d be very surprised and would expect a ton of overhead supply near the $4 level.

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