Natural Gas Outlook for 2024

Natural Gas Price Forecast Video for 2024

This is a market that had seen a lot of noise due to the invasion of Ukraine, and of course concerns that perhaps the European Union would not have enough natural gas. That being said, you can’t say the same about 2023, which was a bit surprising.

Demand and Conflict

Natural gas markets have seen a lot of noisy behavior in both the demand part of the equation and the geopolitical part. For example, demand has fallen due to the fact that most of the winter for 2023 has been relatively mild. Surprisingly, the coup d’état in Niger did not kick off a huge move that lasted for any significant amount of time. Furthermore, a lot of people have been trying to price in the idea of a massive recession, which of course drives down demand as natural gas is quite often used for electricity production.

That being said, the market is likely to continue seeing questions asked of whether or not the markets will continue to see a slowing of economic growth, or the apparent pivot by the Federal Reserve late in the year will change things? After all, you can make an argument that there is going to be a significant amount of demand because the Federal Reserve is going to do everything it can to inflate the economy yet again.

Technical Analysis

Keep an eye on several levels in this market because I think the natural gas markets are setting up for something that’s a little bit more historically normal. We’ve had a couple of wild years, and I think a lot of traders and commercial dealers would be happy with a somewhat calm and predictable market. The $2.00 level underneath continues to be an area that a lot of people will pay close attention to, because it is a large, round, psychologically significant figure, and an area that’s been important multiple times. I am not saying that we cannot break down below there, just that it more likely than not is either the bottom of the range for the year, or close to it.

On the upside, we have seen the price peak at the $3.33 level, but then it fell shortly thereafter. That being said, as we are starting to close out the month of December and looking forward it seems like there is plenty of support below. It would not surprise me at all to see this market go somewhat sideways this year, mirroring what the crude oil market does as we have priced in Armageddon for the natural gas markets, and sooner or later, there has to be some demand.

That being said, if we do rally to the top of the range that I have suggested, it is a 50% gain. During the winter in 2023, we had seen a 40% gain in a steady manner. I think we continue to see a lot of fluctuation between these 2 levels, and the fact that the 20-Week EMA is essentially flat, and the 50-Week EMA is doing the same, it’s very possible that might be what we see.

The one thing that you need to do when trading this market is to pay attention to your position sizing, and I think at this juncture, it has become obvious that the market is getting closer to the bottom than not, and I think that buyers are starting to come in to pick up value. That being said, I don’t necessarily see a situation where things change and bust us out of this range.