Natural Gas Price Outlook – Sluggish Natural Gas Markets

Natural Gas Technical Analysis

Natural gas markets are slightly positive during the early hours on Thursday, up about a percent. But really, at this point in time, that’s not much considering how volatile it’s been. Keep in mind that we are still very much in an uptrend, but it is a grinding and chopping uptrend that can get you into trouble if you are over-levered. It is because of this that I am a bit cautious about jumping into the market with a huge position, but clearly the upside is the only side at the moment as far as trading is concerned.

Short-term dips offer buying opportunities, but we are getting fairly close to rollover in the futures market, which means we’ll be paying attention to March. That means we’re getting close, probably within a few weeks of the absolute top for the season. Now, you can go higher in other seasons, but winter is typically it, as far as the year is concerned and as I have just seen some of the natural gas storage numbers, it is worth noting that quite a bit of European storage is reasonably full.

So, I don’t know if the Europeans are going to be importing as much natural gas going forward. We’ll just have to wait and see and that’s really where the rubber meets the road here. As far as the weather is concerned, sure, it’s really cold in the United States, but that’s about to end in a few weeks. So we might get another bounce or two to higher levels, but we are getting close to the end of the season and that’s the most important thing to keep in mind here. While I wouldn’t short the market, buying needs to be done tactically and in small positions.

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