Natural Weekly Price Outlook – Natural Gas Continues to See Support Below

Natural Gas Weekly Technical Analysis

The natural gas markets gapped higher to kick off the trading week and then just fell from there. At this point, it looks like the market is trying to find buyers underneath the $4 level, and it has in fact found them, but the question is whether or not the market can continue to go higher, perhaps, looking to the $4.50 level. Underneath the recent action, we have the $3.50 level, which was the previous resistance and if we can stay above there, then I think there is more of a buy on the dip type of mentality.

After all, we have situations where the Europeans are going to be importing US natural gas, so that does help, but it’s also that time of year when we see more demand. That will come to an end, and in fact, here in the next week or two, the contract rolls over to March, and then you start to wonder about whether or not warm temperatures are coming. Right now, the forecasts in America are horrific. It’s all about this polar vortex hitting. But that’s short term. So, I think what you have is a situation where you probably have one or two more shots higher and then you start to fade out for the rest of the year.

I could be wrong. After all, the situation in Europe could demand a higher floor in natural gas, which in and of itself would make a certain amount of sense. But I don’t think you’re going to see this market suddenly spike and take off to the upside. I think you’ve got a situation where we’ll get a pullback, a bounce, a pullback, a bounce, somewhere around there will probably start to focus more on warm temperatures.

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