Natural Gas Forecast: Oversupply Keeps Prices Under Pressure

Natural Gas Technical Analysis

The natural gas market has fallen early on Wednesday as traders continue to play the seasonality- the shorter season, if you will, in the United States- with temperatures being very comfortable.

Although we have had some hot days here and there, the demand for electricity has not been able to pull off the huge supply of natural gas. Furthermore, even with exports heading to Qatar, for Qatar to fulfill its demands and contractual demands by the European Union, we are still 5% over the 5-year average here in America, as far as storage is concerned.

We Have Plenty of Natural Gas

We are a long way away from the heating season. So, as things stand right now, it is more or less a neutral to slightly bearish attitude that I see in the market. This is a market that sees plenty of pressure on both sides of the market, and therefore we are looking as if confusion reigns.

The $2.85 level is short-term support. The $3 level above seems to be significant resistance. I am looking at this through the prism of a sideways market, but definitely feel a little bit more comfortable shorting.

I am not aggressively bearish. I just recognize that it is a little early for the shot higher that we will often see as colder temperatures return. The 50-day EMA is relatively flat and showing signs of uncertainty as well. So, it all ties together quite nicely, in my opinion, that this is a market that just does not have momentum quite yet.

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