Natural Gas Price Outlook: Will NG=F Continue Its Bullish Run Above $3.67?

Market Shifts Amid Rising Geopolitical Tensions: Natural Gas Prices Surge and Oil Faces Supply Concerns

In the latest market developments, the price of natural gas has seen significant movement, pushing higher after breaking key technical levels. As of Monday, NG=F prices surged above $3.67, following a bullish breakout that saw it trade well above the 200 EMA ($3.474) and 50 EMA ($3.461). This move signals a shift towards a bullish market sentiment for natural gas, opening the door for potential further gains toward the $4.00 price point. Despite the bullish outlook, traders are also looking at downside risks, with support levels at $3.538 and $3.394, which may offer buying opportunities if the price dips.

Natural gas traded at $3.691 on Monday, holding steady near session highs, but the immediate resistance remains just above $3.79. Traders will be watching closely to see if the commodity can break above these levels to accelerate toward a target of $4.00. This rise is supported by technicals, including a rising channel structure that indicates a solid trend. However, volatility remains a key concern due to geopolitical risks and potential supply disruptions, which could inject significant uncertainty into the market.

Geopolitical Tensions Adding Volatility to Energy Markets

Global energy markets, particularly natural gas and oil, are experiencing increased volatility due to rising geopolitical tensions, particularly in the Middle East. This instability has added an element of risk to traders, especially with the ongoing OPEC+ decisions, such as the recent move to increase oil production by 411,000 barrels per day in June. This expansion in output could create an oversupply situation in a fragile market, which is already dealing with uneven demand recovery across various regions.

For natural gas, the rising geopolitical tensions are also keeping traders on edge, with any major escalation potentially leading to disruptions in supply chains, especially in Europe, where the reliance on imports is high. WTI Crude recently saw a dip of 3.2% to $56.40 following these developments, with traders bracing for a turbulent period as OPEC+ decisions unfold and energy supply concerns rise. These geopolitical risks continue to be a key factor driving the price action in both natural gas and oil markets.

Natural Gas Demand and Market Dynamics in Türkiye and Beyond

The Turkish natural gas market saw a decrease in spot trade volume on Sunday, dropping by 39.2% to around 10.6 million Turkish liras, according to data from Türkiye’s Energy Exchange Istanbul (EXIST). This followed a previous trade volume of 17.4 million liras on Friday. Despite this decline, Türkiye continues to receive significant volumes of natural gas, with about 149.3 million cubic meters of pipeline gas arriving on Sunday.

In addition to fluctuations in trading volume, natural gas prices in Türkiye are showing increasing volatility, with 1,000 cubic meters of gas priced at 12,949.51 liras. For those looking to assess the broader market conditions, it’s important to keep an eye on the exchange rate, with $1 equaling 38.59 liras at the time of reporting. This price point provides critical context for traders and investors analyzing the cost dynamics of natural gas, especially in emerging markets like Türkiye.

Potential for Long-Term Growth in Natural Gas: A Focus on LNG and Strategic Partnerships

Looking beyond the immediate price fluctuations, natural gas is showing signs of long-term potential, particularly with key developments in liquefied natural gas (LNG) projects. Golar LNG Limited recently confirmed its decision to move forward with its FLNG Hilli project, which is expected to generate $285 million in annual net charter hire. With the project set to start in 2027 and expected to provide a significant revenue boost, it underscores the importance of natural gas as a driver of economic growth, particularly in emerging markets like Argentina, where new LNG terminals are set to come online by 2028.

The strategic location in the San Matías Gulf, near the Vaca Muerta shale formation—the world’s second-largest shale gas reserve—gives this project immense potential. The agreements signed by Golar LNG with Southern Energy S.A. (SESA) highlight the growing importance of natural gas as a reliable and sustainable energy source for the future. Golar's ability to leverage its LNG fleet, with long-term contracts backed by fixed-price gas sales agreements, adds a layer of stability to its revenue streams, which could benefit investors in the long run.

Natural Gas Market Outlook: What to Expect in the Coming Months

The outlook for natural gas in the near term remains bullish, with NG=F breaking past crucial technical levels, including the 200 EMA. The price has consolidated above the $3.67 pivot point, and traders are eyeing the next resistance at $3.79. A breakthrough above this level could drive natural gas prices towards $4.00 in the coming weeks. However, the ongoing geopolitical risks, particularly in regions heavily reliant on natural gas imports, could cause sudden market disruptions.

As markets continue to adjust to global supply shifts and geopolitical risks, natural gas stands out as a commodity likely to benefit from increasing demand, particularly in Europe and Asia. With new LNG projects like Golar’s FLNG units expected to start generating substantial revenues by the end of the decade, natural gas could play a significant role in the global energy transition, despite the short-term volatility driven by geopolitical tensions and OPEC+ decisions.

Given the current market dynamics, the recommendation is to hold positions in natural gas for those seeking exposure to a commodity that shows promising growth over the long term, particularly for those invested in the LNG sector. However, caution is advised in the short term due to the unpredictable geopolitical landscape and the ongoing oil supply concerns.

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