Natural Gas Price Outlook – Natural Gas Continues to See Noisy Trading

Natural Gas Technical Analysis

The natural gas market initially gapped lower to kick off the trading session on Tuesday but then turned around to show signs of life again. Ultimately, this is a market where I think, given enough time, it will have to make a bigger decision. But right now, we seem to be perfectly happy to go back and forth in this overall range, with the $3.80 level above offering the ceiling, and the $3.12 level underneath offering support. The 50-day EMA sits just below the current trading area, and I think that offers massive support. If we break down below that 50 day EMA, then you probably see quite a bit of selling going forward, perhaps down to the 200 day EMA, maybe $3.12 as well.

Keep in mind that this is a time of year that is typically negative for natural gas, but we do have a few outliers this year, mainly with the Europeans out there demanding more natural gas from Americans via exports. So that has kept the market somewhat afloat. But really at this point in time, the fundamental outlook in America is very poor because of a lack of heating demand. Electrical demand could pick up if the economy doesn’t slow down. And there’s also the bit about inflation. But right now, I still to this day favor the downside, despite the fact that it has been pretty hesitant to completely break down. Over time, I suspect the sellers will take control of this market again.

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