The National Oceanic and Atmospheric Administration predicted an above-normal Atlantic hurricane season for 2022 on Jun. 8, 2022.
This prediction marks the seventh consecutive year six to ten hurricanes have been forecasted, half of them predicted to be major hurricanes.
We entered into the hurricane season on Jun. 1, 2022. So far, the absence of any hurricane increases suspicion over the predictions for this year, but it never means an end of the hurricane season.
There is no way to know how things will end up, but an above-average season is still possible, as we saw last year. And, we know that this quiet is likely to end in August and September when the Tropical Atlantic tends to heat up.
Technically speaking, in the monthly chart, the candle formed in July 2022 looks quite bullish than the monthly candle formed in June 2022, which was quite bearish. Natural gas started this month after forming a base at $5.330, hitting a high at $9.413 and ending the month at $8.293.
It started to move upward in March 2022, after testing support at 200 Days Moving Average with the formation of a supper ‘Bullish Crossover’ with a breakout of 9 DMA and 26 DMA above the 200 DMA in March 2022.
During this upward journey, natural gas finally hit the peak on Jun. 8 at $9.665, but soon a selling spree dragged down the natural gas prices up to $5.380 on June 30. I find that this monthly sell-off was the immediate impact of the Freeport blast on Jun. 8, 2022, which meant it could take some time to resume supply.
On the other hand, a steep surge in global inflation kept the geo-political moves centered on gas and oil. Russia started using natural gas as a powerful tool to nullify the global sanctions from the West by increasing the natural gas prices to continue its supply to Europe and sell gas and oil to some Asian countries at a discounted price.
The next monthly candle could be larger than the last two in June and July this year as the hurricane season could break the silence in the mid of August and could turn the natural gas prices in a different direction. Still, the price swing could find an equally sharp reversal.
In the weekly chart, futures have formed an exhaustive candle that could find confirmation if natural gas finds a breakdown below $7.847. But only a sustainable move below this could push the natural gas into the bearish territory where the natural gas could find a sharp reversal from 9 DMA, currently at $7.494.
A sustainable move by natural gas above $9.6 could keep the trend in bullish territory amid wild price swings during the upcoming weeks.
Disclaimer: The author of this analysis does not have any position in natural gas. Readers are advised to take any position at their own risk, as Natural Gas is one of the most liquid commodities in the world. Remember, YOU push the buy button and the sell button. Investors are always reminded that before making any investment, you should do your own proper due diligence on any name directly or indirectly mentioned in this article. Investors should also consider seeking advice from an investment and/or tax professional before making any investment decisions. Any material in this article should be considered general information and not relied on as a formal investment recommendation.