Natural Gas Forecast: Heavy Supply Caps Prices Before Winter

Natural Gas Technical Analysis

The natural gas market has been relatively flat before the open pit session on Tuesday, as we continue to just drift back and forth. Ultimately, this is a market that is in the midst of getting ready to roll over into the October contract, which could be a little healthier for pricing, mainly due to the idea that traders are going to continue to pay close attention to the idea of demand. And with the massive amount of supply out there, it makes a certain amount of sense that prices are somewhat suppressed.

As temperatures start to fall in the United States, then we’ll see a little bit more in the way of demand, and that should drive up price eventually. Furthermore, later this year, we’ll be talking about the possibility of Europeans needing to import natural gas from the United States, which also could drive up pricing.

Seasonal Outlook and Contract Rollover

That being said, this market continues to be very noisy, and it continues to be a scenario where traders might be willing to take a look at dips as potential buying opportunities, but we’ll have to wait and see. We are getting closer to that roll over into positivity, but we need to see what that ends up looking like.

Overall, this market, I think, is going to be choppy for a while, but seasonally speaking, we are getting close to when people start to price in winter storms, that kind of thing.

Ultimately, the situation in Europe is going to be fluid. That’s going to be driven mainly by the Middle East and whether or not the supply of gas from Qatar makes it to the EU.

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