Natural Gas Price Outlook – Natural Gas Continues to Look at Weather Patterns

Natural Gas Technical Analysis

Natural gas has rallied slightly during the early hours on Wednesday, but I think we still have a lot of overhead problems at the moment, and I do believe that with a potential economic slowdown in not only the United States, but multiple other places around the world, and of course, the fact that temperatures are starting to pick up in the United States and Europe driving down demand, it is probably only a matter of time before natural gas starts to sell off. That’s the cycle this time of year. Most of the time, you will see natural gas fall off of a cliff.

I am playing it that way, but I also recognize that it can be very noisy from week to week, especially this time of year when temperatures can suddenly plunge and then shoot right back up. So, most of the time, as natural gas is traded on the next weather report, things can be very volatile. I have no interest in buying natural gas, not now. It wouldn’t make any sense for it to rise unless some type of geopolitical conflict or something causes issues.

And the one thing they could, at least in theory, is if we still can’t get Russian gas into the EU, which ironically, the EU during the war, during the course of the war in Ukraine, has spent more money on Russian natural gas than they have sending to Ukraine. So that tells you how people lie, numbers don’t. That is how much natural gas the EU is reliant upon coming out of Russia.

This contract is an American contract and if that ends up being where they have to get gas, it will keep it a little bit afloat as they will have to import liquefied natural gas. The problem, of course, is it’s much more expensive to do it that way. So we’ll see how this plays out. You have to pay close attention to those headlines coming out of Europe and to a lesser extent Russia. But all things being equal, this is a market that should go looking to the $3.50 level over the next several weeks.

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