Natural Gas Price Outlook – Natural Gas Continues to See Noise

Natural Gas Technical Analysis

The natural gas markets initially plunged during the open on Monday, but we have seen a turnaround, and as I recorded this video, we are currently testing the 50-day EMA near the $3.91 level. This is a market that I think continues to be very noisy, which does make quite a bit of sense considering that we are going to be all over the place with risk appetite as long as there are concerns about the potential tariff war. Because of this, I think you have to understand that despite the fact that demand for natural gas will almost certainly fall, due to warmer temperatures in places like the United States and Europe, the reality is that most traders are also looking at the potential disruption of natural gas going into the EU via Russia and could be coming from America despite the fact of everything that’s going on.

We are starting to see the time of year when you might have a bit of negativity due to the fact that we just won’t have as much heating demand. But for what it’s worth, it is somewhat cold in the United States this week, so we may continue to withdraw natural gas from storage, which we did quite handily during the winter this year as it was colder than usual. That being said, as temperatures stabilize and get a little bit warmer, more likely than not, what we are going to see is a situation where eventually prices plunge.

The $3.50 level for me is where the trend changes. And if we get below there, things could get rather interesting to the downside. On the other hand, if we turn around and take out the $4.50 level to the upside, that would be extraordinarily bullish. But right now, I think there is still a lot of overhead supply that will continue to cause issues for the market.

For a look at all of today’s economic events, check out our economic calendar.