Natural Gas Forecast – Will $2.75 Level Hold Amid Weak Seasonal Demand?

Natural Gas Technical Analysis

The natural gas market has been very noisy during early trading on Tuesday. The market has been hanging around the $2.75 level, an area that has been both minor support and resistance as we are in a strange time of year trading the September contract, looking for some type of reason for natural gas to continue going higher. This is a situation where people continue to watch the oversupply of gas and the lack of demand.

Seasonal Demand Weakness and Geopolitical Factors

But ultimately, the market is still going to be facing the fact that there isn’t a heatwave, at least nothing of note to spike demand for air conditioning. But at the same time, it’s not exactly cold in America either, so heating demand for natural gas is all but gone. So, with that being said, it’s a very weak time of year for demand, and the rallies are going to be swimming upstream. This is literally fighting the natural momentum, or lack of momentum in this case in this asset.

There is hope in the form of Qatar importing some gas from America to fill their obligations in the European Union, and that could be a story to watch later this year if Qatar fails to rebuild. But as things stand right now, the market is still well below a couple of major resistance areas. So, although it’s been a little bit bullish over the last couple of days, it still will face some challenges on any rally as there are so many things working against the bulls at the moment.

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