Natural Gas Price Forecast – Natural Gas Markets Sit Just Below 200-Day EMA

Natural Gas Technical Analysis

Natural gas markets rallied a bit during the trading session on Tuesday, with the 200-Day EMA sitting just above. If we can break above the 200-Day EMA, then the market could go much higher. At that point, I think we probably go looking to the recent highs, and therefore threaten a potential breakout. Ultimately, the natural gas markets have a cyclicality to them that people pay attention to, as demand will pick up as temperatures plunge. With that being the case, the market is likely to continue to see the momentum pickup, and I think at this point in time we remain a “buy on the dips” type of situation, with the trendline underneath that offered so much in the way of support recently.

I have no interest in shorting natural gas, due to the fact that we not only have the time of year driving prices higher, but we also have the lack of supply in the European Union potentially be a major driver this winter as well. As long as we continue to see the war in Ukraine rage, there’s almost no chance of Russian gas heading into the European Union, and quite frankly I think the Russian gas heading into the EU is something that we won’t see for years after the Chinese have been massive buyers of it, as well as the Indians, and therefore Russia will extract a huge premium if and when they finally do supply.

The Europeans will have to purchase liquefied natural gas from the Americans, and that’s where this contract comes in. After all, most natural gas pricing that you see is based on US natural gas, and therefore we should see all of them move in tandem. I use the ETF market, simply because it allows a lack of leverage and therefore, I can ride out all of the volatility that we are going to see with the weekly weather reports. Remember, natural gas is highly sensitive to short-term weather fluctuations in the northeastern part of the United States. The $3.00 level underneath should continue to be a major support level in this market.

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