Natural Gas Price Outlook – Natural Gas Continues to See Overhang of Resistance

Natural Gas Technical Analysis

The natural gas market initially rallied a bit during the trading session on Friday and the overnight hours as word got out that Israel had in fact attacked Iran. It had a lot of implications in the energy markets, but you can see that we’ve given back all of those gains, which makes a certain amount of sense considering this is a time of year that’s typically somewhat bearish for natural gas anyway, so it should not be a huge surprise that it’s difficult to get any real momentum to the upside.

If we do break above the $3.66 level, we could go back to the $3.85 region. But ultimately, I do think that we eventually squeeze down towards $3.12. There is the 50-day EMA in the middle of the candlestick of the last four trading days, and there’s the 200-day EMA near $3.33 that could offer a little bit of support. If we break down through there, then I think that it opens up to the bottom of the range.

This has been a little bit different in terms of the way we have behaved this time of year, because typically you’re focusing on the fact that there’s no heating demand in the United States, which obviously has a major part to play in demand in what is a US contract. However, the Europeans continue to import US liquefied natural gas, so that has skewed the market a little bit. But at this point in time, that may slow down as well. So, with all of that, I’m still looking at this as a market that’s range-bound, but I prefer the downside.

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