Natural Gas Price Outlook -Natural Gas Continues to Chop

Natural Gas Technical Analysis

The natural gas market has gone back and forth during the trading session on Friday, initially gapping lower only to turn around and show signs of life again. With that being said, the market looks as if it is just trying to sort out whether or not we can continue to go higher. But really at this point, I’m not necessarily thinking that we are ready to break out. I think it’s probably more likely that we stay within the range that we have been in for some time. The $3.85 level has been a massive barrier. And if we can break above there, then we could possibly go looking at the $4 level.

If we pull back from here, the $3.50 level is a potential target for sellers, but you should keep in mind that the 50 day EMA is sitting just above there. If we break down below there, then we could go as low as the $3.12 level, with the 200 day EMA between here and there. Natural gas is a very messy market, and right now, it’s even more so than usual. So do be careful with this kind of just messy, sloppy trading.

This time of year, we typically get a lot less demand for natural gas, but there are a lot of concerns about the European Union demand because they of course are not getting gas from Russia anymore. It has been hot in America for the last couple of days, but really, at this point in time, we are before the high electricity demand season. Although the jobs number suggested that perhaps the employment situation is better than anticipated in America, and therefore we may see more industrial demand for electricity, which directly influences natural gas. That being said, we’re at the top of the range. That’s the most important thing to me. So, I do think that we probably fade rallies that show signs of exhaustion.

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