Natural Weekly Price Outlook – Natural Gas Continues to See Support

Natural Gas Weekly Technical Analysis

The natural gas market has shown itself to be somewhat negative during the week, but did pull back into support and therefore subsequently bounced a bit on Friday. It’s worth noting that there are concerns now that Russian gas won’t make it to the EU, so this may have a knock-on effect here in the US contract. This is a market that’s doing everything it can to break out with the $3.75 range, somewhere in that area at least, offering a bit of a barrier that I think might be difficult to overcome. If we do, it will spring natural gas much higher.

Short-term pullbacks continue to get bought into, but longer term, we’ll have to see. Because quite frankly, we’re already rolling over into the February contract in the futures market, which greatly influences what you’re trading here. And once you get into March or April, you’re thinking about spring, not winter, and remember, this is a weather-driven contract more than anything else, and weather in the United States specifically.

So I suspect that we have a little further to go to the upside for the next couple of weeks, then we start to roll over. So, in the short term, I am a buyer of dips. Longer term buy and hold, not so much. I don’t really like doing that this time of year, although events can make that be a reality. But as things stand right now, I think $3.75, maybe $4 might be your top for the season.

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