How High Could The Natural Gas Prices Rise?
2022.04.04 10:55
The current geopolitical scenario makes natural gas an interesting commodity to trade. Russia is saying that European and all Western nations need to pay for Russian goods in Rubles, and the G7 says,
“Well, we won’t do that. You have to honor your current contracts.”
The Europeans get a substantial portion of their natural gas from Russia. So, if the Europeans refuse to pay in Rubles and Russia won’t sell natural gas to them, the obvious place for Europe to obtain natural gas will be the United States. The United States produces all of its domestic natural gas and therefore could, or at least should, be able to export some to Europe.
Using Ichimoku Cloud analysis, let’s look at the United States natural gas market from the Nymex exchange to see what the market thinks. Does the market think there will be additional demand for US natural gas?
Natural Gas weekly chart.
The weekly chart has been going up for an extended period. There’s been quite a move in this market which started in March of 2021. Crude oil started moving up in April of 2021. The weekly chart shows prices trending above the Ichimoku Cloud. Additionally, you’ll note the Ichimoku Cloud wave count and targets. The Ichimoku Cloud system has all of these elements built into its analysis.
The Ichimoku Cloud Lagging Line is also above the Cloud, confirming the uptrend. Price is above both Ichimoku Cloud moving averages. The longer-term and more robust moving average called the Base Line is red. The Conversion Line is blue, and it’s a faster-moving average.
As noted by the green up arrow, the Ichimoku Cloud system indicates a bullish opportunity with this week’s close. In December, the market pulled back, forming a nice retracement, but it has been heading up steadily since. If the price breaks above wave five high, it should continue up to the target resistance zone. The black line at 7.58 indicates the most likely place the price will rise. 
Natural gas futures daily chart.
The daily chart is in a strong uptrend above the Ichimoku Cloud. Price has headed to the target zone but has not reached the old high, as noted by the black target line. The Ichimoku Cloud Lagging line is above price and clear to head higher.
The moving averages are rising, indicating the momentum is up, and more upside potential is likely. With an up-trending daily chart and bullish weekly chart, the Ichimoku Cloud expects prices to go higher.
Natural gas 1-hour chart.
Natural gas has been moving up steadily since the end of March. Price and the Lagging Line are above the Ichimoku Cloud, showing the uptrend. The 60-minute wave count expects a five wave to break up above wave three high.
The Conversion Line’s shorter-term moving average has crossed above the longer-term moving average, the Base Line, increasing the momentum. The Lagging Line has cleared through price, opening a path for the market to head higher. A break of the 60-minute wave three highs could be an early opportunity to consider a bullish position in natural gas.
Overall, the natural gas market is looking extremely bullish. It’s in an uptrend in all three timeframes. The Ichimoku Cloud analysis suggests the G7 may hold to its word and start buying some natural gas from Russia from the United States and less, if not none.
