Natural Gas Price Outlook – Natural Gas Continues to See Buying

Natural Gas Technical Analysis

The natural gas markets have shown themselves to be somewhat bullish during the early hours on Tuesday, but it looks like this $3.85 level will continue to be important as traders are trying to determine whether or not they can continue to push this towards the $4 level. The $4 level, of course, is a large, round, psychologically significant figure that I think will attract a lot of headlines if we do get there. Ultimately though, we have given back some of the gains and a lot of this I think is more or less going to be about whether or not Iranian natural gas fields and production get taken out.

If we do pull back from here, and that wouldn’t surprise me at all, the market could drop to the 50 day EMA near $3.56, but we’ll just have to wait and see whether or not we can get there. Regardless, this is a market that typically this time of year does have a lot of problems holding gains and with that, I think you have to look at this through the prism of a market that you need a reason to start shorting.

You don’t necessarily want to be a buyer, unless there’s an external pressure point, for example, if we find out the Iranians can’t produce natural gas at all. Otherwise, the lack of heating demand in the United States alone, as well as a lack of increased electrical production due to air conditioning, probably drives this towards that 50-day EMA.

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