Natural gas prices are correcting within upward channel ahead of another rally

Natural gas (NG) is currently trading at $2.770, suggesting a healthy correction after its recent surge. Earlier today, we witnessed a temporary balance between bulls and bears, with a global deficit of liquefied natural gas (LNG) supporting buying pressure and a well-supplied US market giving strength to sellers.

Even so, the overall sentiment remains positive. Prices keep moving within a parallel ascending channel, having retreated from the ceiling and now hovering around average support levels. NG has just undergone a correction below the 23.6% Fibonacci retracement ($2.790) but managed to stay above the 38.2% threshold ($2.738). This confirms that the uptrend is still intact and makes the current decline a healthy breather ahead of another potential rally to the channel's upper boundary.

The Chaikin Oscillator, however, appears to be stuck in negative territory, formally indicating that sales volume is prevailing. Yet, it did not fall sharply yesterday, staying close to the zero line. Thus, despite the price drop, the pace of distribution remains slow, and selling seems to be more profit‑taking than aggressive.

The fundamental picture is mixed, but with a bullish tilt in the medium term. Let’s take a closer look at the current situation. On the one hand, US NG storage remains elevated, and late-May weather forecasts promise temperatures near seasonal averages. On the other, the global LNG market is going through hard times due to the Strait of Hormuz blockade and damaged facilities in Qatar. As a result, Europe and Asia are left with little choice but to purchase American fuel. Expectations of a potential energy deal between the United States and China, as well as the launch of Freeport LNG, create a strong fundamental floor, limiting any significant downside.

Pay attention to the following trading strategy:

Buy NG at the current price, with Take profit at $2.870 and Stop loss at $2.730.

This forecast remains relevant between May 13 and May 20, 2026.