Natural Gas Price Forecast – Natural Gas Markets Continue to Build a Base

Natural Gas Price Forecast Video for 28.12.22

Natural Gas Technical Analysis

Natural gas markets have gapped to the upside on Tuesday, showing signs of strength, but quite frankly it fell apart almost immediately. We filled the gap, so now we need to decide whether or not we are going to build a viable base, or if we are simply going to break down. I suspect that we probably have a little bit of bouncing around to do at the moment, especially as the $5.00 level is just underneath and is a psychologically important level. If we were to break down below the $5.00 level, then it opens up the door to much deeper selling. I do believe this happens eventually, but I don’t necessarily think it happens right now.

In other words, I like the idea of fading rallies, because now that the Freeport terminal is open, much more LNG will be available to the world, thereby increasing the supply out there. It’s the scarcity in places like Europe, which of course is a self-inflicted wound, that has caused the problem. The Asians continue to buy plenty of LNG from the United States, but that is something that’s quite typical. There’s quite frankly nothing new about that.

Rallies at this point in time will be opportunities to short this market on signs of exhaustion, as we are already starting to focus on February, meaning that we will be looking at March rather quickly. The March contract of course is the beginning of spring, and therefore traders will start to look at warmer temperatures, and therefore much less demand. Furthermore, global growth is falling off of a cliff, so that means industrial demand is going to fall right along with it.

For a look at all of today’s economic events, check out our economic calendar.