Natural gas continues to enjoy the support of technical analysis, and there is no reason why this trend should change any time soon. The gap between supply and demand remains large enough for prices to remain relatively high on the long run. While the current supply does not meet investor’s expectations, it is important to note that the recent increase in production is a positive sign for future natural gas markets. The current gas futures prices are quite low compared to the long term averages, and this is expected to change in the near future. In fact, some traders are already taking advantage of the current market situation, and they are expecting further falls in the coming months.
In addition, there are several indicators out there that point to a continued decrease in the cost of natural gas over the coming year. Among them is the fact that there is a marked difference between the price per barrel of oil and the price per barrel of natural gas. This is especially evident during the summer months when demand is significantly higher. However, if we take a closer look at the data, we can see that it is the recent rise in the price per barrel of oil that is the main culprit of the recent fluctuations in natural gas prices.
When we take a close look at the relationship between oil and natural gas, we see that there is only one line that connects the two markets. It goes like this: natural gas will continue to enjoy most of its price advantages, until the cost of crude oil increases again. It would be quite difficult for anyone to expect this to happen anytime in the near future. Most experts would say that the market over the coming years will remain flat, unless there is an unexpected change in the world’s oil supply. However, this does not mean that there is no chance for prices to increase substantially in the coming years.
The current price per barrel of natural gas that we are paying is the result of several factors that can lead to increase in the market over the coming years. One of these factors is the increase in demand that is resulting from high levels of domestic consumption. This means that the amount of oil that can be extracted will slowly but surely increase as the number of domestic users increase. Furthermore, the price per barrel of oil that consumers are currently paying is the result of the fact that many of them still consider natural gas as a form of cheap energy. If they were to change their perception, it is possible for oil prices to decrease.
On the contrary, the situation is completely opposite when we take a closer look at the relationship between crude oil and the prices of natural gas. Since the prices of crude oil have dropped in the past few years, it is very unlikely that the market is going to increase anytime in the near future. In addition, this is also a very long term trend that does not suggest that the prices of oil will decrease anytime in the future. As a result, the technical support path of lowest resistance, which is found in the United States, Europe, Australia, Canada, and Norway, is being predicted to remain intact for the next several years.
Another area where we can expect an increase in the price per barrel of natural gas is in the Middle East. Saudi Arabia is the world’s largest producer of natural gas. At the same time, the price per barrel is increasing in the country due to the rising demand from other countries in the region. Furthermore, a growing demand from developing countries in Asia is expected to boost the prices of the resource in the future. If we take all these factors into consideration, it is not surprising to see a number of traders predict that the global crude oil and natural gas markets will increase over the coming years.
The United States is a major exporter of natural gas and the country has the highest level of domestic consumption. Moreover, the United States is the world’s largest producer of oil. If we continue with this trend, then the prices of the commodities will start rising globally. However, there are several technical indicators that are pointing in a different direction. Some of these include falling stock indexes, a sharp increase in short selling, falling bond yields, a breakout in the commodity oil market, and a rise in U.S. Treasury Bonds.
When looking at the charts, traders should pay close attention to the price of natural gas because most of the times it follows a bullish market pattern. Traders who understand how to read the charts are able to predict where the market will go in the near or long term. In addition, they are also able to profit from the situation by selling in the direction of the trend. Most of the time, the price of natural gas in the markets is supported by the fundamental factors mentioned above and a little bit by technical factors. So, if you want to grab a large profit from the current natural gas price increase, then you should start trading in the direction of the market trend.