Natural Gas Price Forecast – Natural Gas Pulls Back Slightly in Early Hours

Natural Gas Technical Analysis

Natural gas markets have pulled back slightly in the early hours on Wednesday, but really at this point, it looks very much like a market that is still extraordinarily bullish. And I think given enough time, this is a market that will eventually find buyers. One of the things that’s moving the natural gas market higher is the fact that we are going to get hotter temperatures in the back half of June in the United States.

In case you don’t know, the contract that you are trading is almost certainly going to be based on Henry Hub, which is in Henry, Louisiana. That doesn’t mean that the situation in Europe doesn’t have an effect. In fact, it does. But as natural gas spikes, as far as the cost is concerned in the European Union, then they will ship liquefied natural gas across the Atlantic. And that’s part of what we’ve seen as well.

I think at this point in time, we have a situation where the $2.50 level underneath probably offers a certain amount of support, assuming that we even get that far. Now, that being said, I think this is a market that probably tries to break well above the $3 level, maybe beyond that. This is a short-term thing though, because I think this is a situation where traders look at this through the prism of a short-term trade.

Cyclically speaking, this isn’t necessarily the strongest time of year for natural gas. So, I think some big pullback here opens up the possibility for value hunting. For myself, I am still involved with natural gas via an ETF. So the ETF, of course, takes out all of the leverage. That’s how I prefer to trade this particularly volatile market. If you don’t have that ability, small CFD positions are going to be the way to go. We will get a massive spike well beyond this eventually this year, perhaps when colder temperatures hit.

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