Natural Gas Price Outlook – Natural Gas Continues to Grind Higher

Natural Gas Technical Analysis

The natural gas markets have rallied a bit during the early hours on Thursday as we continue to see a lot of back and forth trading right around the major moving averages in the form of the 50 day EMA and the 200 day EMA. Keep in mind that the natural gas market is typically a bit soft this time of year. So with that being the case, we’ll be watching whether or not there are signs of exhaustion, but I think if there is a breakdown below the 200 day EMA and by extension, the uptrend line opens up the possibility of a move to the $3 level. Now, I don’t know if that happens right away, but I do think this is something that eventually is coming, mainly due to the fact that heating demand is gone this time of year in the Northern hemisphere. And of course, we don’t have super-hot temperatures in the United States, although it is fairly warm, to keep natural gas elevated as much.

Remember, in a huge part of the United States, natural gas is burned in order to produce electricity. So, with that being the case, it does make a certain amount of sense that if temperatures spiked again, that maybe we get a little bit of a bump, but I’m still inclined to fade the first signs of exhaustion. We just don’t have it quite yet. All of that being said, keep in mind that Friday is a shortened day due to the holiday.