Natural Gas Price Outlook – Natural Gas Continues to See Buyers

Natural Gas Technical Analysis

The natural gas markets have gapped higher to kick off the trading week and now have pulled back to test the $4 level before turning around and showing signs of life. The futures market, of course, at this point in time are still focusing on the idea of colder than anticipated weather in the United States, and of course, the idea that Europe will be importing natural gas due to the fact that they have massive issues with supply coming from Russia.

The whole bizarre situation of natural gas going through Ukraine from Russia into Europe has been shuttered and now between that and other gas pipelines being destroyed, it looks like the Europeans are going to be importing natural gas from the United States, and that’s part of what we’re looking at here.

But again, it’s a cyclical trade as well. This is a time of year when you see more demand anyway, so it all lines up quite nicely. Natural gas should continue to see buyers on dips, at least for a while, and as temperatures in America are very cold at the moment and only getting colder over the next couple of days, this gap higher does make a certain amount of sense. But whether it is able to stick as far as longevity is concerned, that remains to be seen. I think we’ll probably try to get back to the $4.50 level in the short term. I do like the idea of buying dips, but again, natural gas is very dangerous. You don’t want to be over levered to it.

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