Natural Gas Price Analysis – Natural Gas Continues to Build a Potential Base

Natural Gas Technical Analysis

The Natural Gas market has risen a bit in the early hours on Friday, but it is worth noting that we have given back some of those pretty quickly. That being said, I look at this market through the prism of a market that is trying to find some type of floor near the $3 level. It’s a large, round, psychologically significant figure, and it is an area that we had gapped from.

The market continues to look at the reality of cold temperatures in the United States coming, and that should drive Natural Gas demand higher. The market is likely to continue to focus on inventory numbers and whether or not we are going to see any kind of scarcity.

Inventory Data and Price Targets

The latest inventory numbers have suggested that, despite the fact that there has been a drawdown, there was a lot more supply to begin with. That’s been the problem here. Nonetheless, we are getting later in the season, and one would assume that demand picks up again. So, I am watching this bounce for a potential move towards the $3.50 level.

A break above the $3.50 level offers a real opportunity for Natural Gas to go much higher. I don’t necessarily think that’s an easy thing to accomplish, and I would point out that Monday is Martin Luther King Jr. holiday, so it is a shortened day for trading anyway. But as things stand right now, this looks like a market that is trying to find its floor and eventually will. You are probably going to have to be very patient, though.

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