Natural Gas Price Analysis – Natural Gas Continues to Bump Along the Bottom

Natural Gas Technical Analysis

The natural gas markets are very quiet during the trading session here on Thursday, as we are looking for a bottom. The $2.60 level has offered a bit of support as of late and I think that is something worth watching. If we can stay above the $2.60 level, a short-term rally from here could open up a move towards the $2.75 level, possibly even as high as $3.

Market Outlook and Seasonal Demand

The demand for natural gas is anemic at best because keep in mind this is a US contract, and right now, most Americans can just open their windows. They do not have to worry about heating, and it is not exactly hot enough to worry about cooling, so natural gas demand is very poor. This time of year, is typically very bad for the natural gas markets, so anytime it rallies and shows signs of exhaustion I am more than willing to start shorting, especially if we get somewhere near the large number of $3.

Later this year we will see more demand for exports and that probably changes the dynamic in winter a little bit due to the damage in the Middle East to the liquefied natural gas pipelines. But I do think, given enough time, any rally at this point in time invites selling. That is just the way I play this market this time of year. I do not see that changing this year. It is not particularly an erratic weather pattern that the Americans find themselves in right now. It is actually very stable and peaceful weather patterns and that generally does bad things to natural gas pricing.

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