Natural Gas Midday Technical Analysis November 1

Natural gas markets initially tried to rally during the trading session on Thursday, but then broke down towards the $3.25 level. I think there is a little bit of malaise to the marketplace as I record this, simply because the Nonfarm Payroll Numbers come out during the trading session tomorrow, meaning that we will get a look at potential demand for energy, and by extension natural gas.

NATGAS Midday Video 01.11.18

Obviously, heating concerns and the United States also become an issue, so keep an eye on weather reports as well. Right now though, I think the seasonality will help a bit but we also have to worry about a warmer than usual winter in the United States as we get another “El Niño winter.” That of course means that there are going to be warmer than usual temperatures, and that of course means that there will be less demand for natural gas, heating oil, and the like.

However, if the jobs number continues to overheat there could be the counterargument that factories will need more natural gas and power plants may. Because of this, I think we are essentially going to watch this market bounce around between $3.20 on the bottom, and $3.40 on the top. Because of this, I think applying some type of range bound strategy probably works best at this point. We of course will revisit these questions after the jobs number, but between now and then range bound trading should be the best way.