Natural Gas Price Outlook – Natural Gas Continues to Look Elevated

Natural Gas Technical Analysis

During Tuesday’s trading session, natural gas markets fluctuated within a relatively tight range after experiencing significant volatility on Monday. Overall, this market remains highly erratic due to several conflicting pressures. One major factor is the seasonal transition, as the United States exits winter and demand is expected to decline rapidly. However, concerns over European supply could drive continued demand for U.S. natural gas exports. This has been the case occasionally, but in the end, the demand will fall in the next few months.

Additionally, the past winter was harsher than recent years in the United States, which has led to lower supply levels. As a result, storage facilities will need to be replenished. That said, this is a temporary situation, and the key question is how long it will take for the market to break down.

Chasing this market at this time of year can be risky, as Monday’s price action demonstrated. If natural gas breaks below the $4.30 level, we could see increased downward momentum, potentially bringing prices down to the $4.00 level. A break below that would further confirm that the uptrend for this cycle is nearing its end. This remains a highly cyclical market, and as temperatures rise, the outlook for natural gas weakens. For that reason, buying at this stage may not be the best approach, as we can get the occasional plunge due to a severe lack of demand at this point on the calendar.

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