Natural Gas Price Outlook – Natural Gas Continue to Look Soft

Natural Gas Technical Analysis

The natural gas market has been noisy during the early hours on Thursday, but quite frankly, I think this is a situation where traders are looking at the 200-day EMA as a bit of a magnet for price. I think short-term rallies at this point in time continue to be sold into due to the fact that temperatures in the United States continue to rise. Furthermore, we also would see demand drop in the European Union as temperatures rise there as well, although there is the question about whether not Russian gas will still be available.

Quite frankly, with all of the jaw boning going out there, you never really know what the truth is going to be when it comes to natural gas on the continent. Electricity demand won’t spike for a while, especially if the United States heads into a recession, but even if it doesn’t, natural gas then typically spikes when you see hot temperatures. We are a few months from any of that coming. So really at this point in time, it is the cyclical trade that I’m paying attention to with natural gas dropping from here.

Inflation is probably going to pick up and that might cushion some of blow for the bulls, but over the next couple of months, I would fully anticipate that natural gas sells off. The $3.50 level for me, at least at the moment, is the ceiling in this market, with $3 offering a bit of support.

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