Natural Gas Price Outlook – Natural Gas Continues to See Downward Pressures

Natural Gas Technical Analysis

The natural gas market continues to drift a bit lower, and as you can see, it looks very much like a market that is trying to find its floor near the $3.00 level. We are approaching a previous uptrend line and the 200 day EMA indicator, so that could give us a little bit of a technical balance. We also have a gap in the chart above here, and typically gaps do eventually get filled, so maybe that happens as well.

But I think any rally at this point in time needs to be looked at with suspicion as the winter is starting to wrap up, as far as the natural gas markets are concerned, as the futures contract being traded now, of course, is March. Once March hits, temperatures generally climb, or at least aren’t as bad in the Northern Hemisphere, and that has a major influence on pricing. If we see a winter storm between now and March in the Northeast part of the United States, which we very well could, that probably kicks off one more shot higher, but that’s probably going to be about it.

Natural gas is in abundance. Even Europe has quite a bit right now, so this market is going lower. But I would look for a rally to try to fill this gap that saw some exhaustion, perhaps a long wick to the upside, and look at that as an opportunity to get short if you choose to. As for myself, I typically just buy natural gas in the early part of winter and then get rid of it sooner or later. Sometimes, like I did this winter, I did it twice. It’s a good addition to my account, but it’s not a mainstay. Natural gas markets are extraordinarily difficult to get a handle on.

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