Natural Gas Weekly Outlook – Natural Gas Continues to See Overhead Resistance

Natural Gas Weekly Technical Analysis

Natural Gas has been back and forth during the course of the week as we are hanging around and trying to sort out whether or not demand is going to pick up or fall at this point. After all, we are pretty late in the season, so it does favor the downside, but you also have to keep in mind that there are some somewhat special circumstances this year due to the fact that there are a lot of concerns about whether or not the Europeans will be needing to import LNG from the United States. Furthermore, inflation does tend to keep the price up a little bit.

However, the demand’s going to drop. We had a pretty cold winter in the United States, so supply is lower than it typically is this time of year, but it’s only a matter of time before drillers fill that supply again. There is a narrative out there about AI demanding more energy and therefore demanding more natural gas, but that’s a bit of a stretch at this point in time.

The reality is most of the demand for natural gas is centered around the idea of heating and as temperatures rise, there’s just less need. Furthermore, if we can get the situation in Ukraine under control and to a peaceful resolution, it’s very possible that we might end up having more gas for Europe that doesn’t need to be sent from overseas. So that would be negative as well.

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