Natural Gas Bottom: What’s Taking So Long?

natural gas futures trading price low bottom important chart may 3

A big story last week was that AI is fueled by natural gas, which should increase demand.

That story did little for the futures price.

Then this week other stories came out that: 

  1. Prices were supported by higher feed gas flows to Freeport LNG and lower U.S. production.
  2. Chesapeake Energy’s decision is to maintain output curtailments.
  3. says that a hot forecast for Texas could also lift demand for power generation.

We also just learned that the weekly build in inventories came in roughly in line with expectations which was received with a rise in prices as of today.

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Year-to-date, natural gas prices are down nearly 40%.

Analysts believe that solar will replace the need for natgas, but can the US power grid sustain the growth in demand?

After all, good or smart business generally goes the way of the cheapest fix, and not necessarily the one that is better ecologically.

Be that as it may, it’s the charts that keep us on the ride side.

Let’s have a look.

On the futures chart, June contract, the answer looks simple.

Wait for 2 closes over the 50-DMA and the phase change to recuperation will confirm.

ung natural gas etf trading price bottom chart may 3

The ETF UNG is another option to watch, however, as I have noted many times before, the underlying commodity should drive investment decisions.

In the chart, we see consistency in that UNG has yet to clear the 50-DMA to a better phase.

What I find interesting here is that our real motion indicator has a bullish diversion with price over the 50-DMA.

Plus, our leadership indicator at this point shows UNG trading on par with the benchmark.

Twitter: @marketminute

The author may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not represent the views or opinions of any other person or entity.