Natural gas markets have rallied significantly during the trading session on Thursday, reaching towards the $2.80 level as we continue to see the idea of demand for natural gas increase. The temperatures are starting to fall in the United States again, and that of course has a lot to do with what will happen in the short term. I think that the $3.00 level above is a major area of resistance and target, so it is worth paying attention to. If we can break above the $3.00 level, then we could go towards the $3.25 level after that.
NATGAS Video 16.10.20
To the downside, the 50 day EMA is sitting right around the $2.50 level, and I think will offer a certain amount of support. The markets have shown quite a bit of proclivity to continue to go to the upside due to the fact that we have also had not only colder temperatures but also have had to deal with hurricanes and a threat to supply. All things being equal, this is a market that I think will continue to try to grind higher for at least the next couple of months, so I continue to buy short-term dips for small moves.
Given enough time, I do think that once we get towards trading spring contracts, we will start to roll over yet again. In the short term though, with the increase demand and of course the bankruptcies that we have seen in this industry, it does make quite a bit of sense that we would go higher every opportunity that we get.
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