Natural Outlook – Natural Gas Continues to See Upward Pressures

The natural gas market was slightly choppy in the early hours of Thursday, as the market continues to see a drift and grind higher as the most likely of outcomes. However, it is worth noting that the season is growing short, as futures traders will be switching over to March contract trading soon.

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• Natural Gas

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Natural Gas Technical Analysis

Natural gas markets have been a little bit positive in the early hours of Thursday, but really at this point in time, I think the market is paying more attention to the $4 level than anything else in the futures contract, as the market is likely going to continue to see a situation where there is plenty of support underneath.

With that, I think you also have to assume that the support probably extends all the way down to the $3.50 level, and the $3.50 level of course, is an area that will feature the 50 day EMA. That’s an area that previously had a lot of resistance attached to it. So, market memory should dictate that there’s a bit of a floor there.

With that being the case, I think you have to look at this as a buy on the dip market this time of year with the cold temperatures in the United States and of course, the whole idea with the US exporting probably more natural gas to the Europeans as they almost certainly will need more due to the lack of Russian gas heading into the continent right now.

It should remain a fairly bullish market, at least for the short term, but sooner or later futures markets will start to focus on spring and in fact we roll over to the March contract at the end of the month. So, we’re getting close. We probably have one or two more shots higher before the cycle ends and we start to drift downwards.

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