Natural Gas Price Analysis – Natural Gas Continues to Grind Higher

Natural Gas Technical Analysis

The natural gas market finds itself rallying on Friday as it looks like we are continuing to see a lot of noisy behavior in this market. That’s not a huge surprise. Quite frankly, this is a market that I think will remain very noisy as we are getting a little bit of heat in the United States, but I don’t think it’s enough to draw down inventory enough to worry too much about it.

Weather Patterns and Seasonal Demand

I think traders are looking at longer-term weather patterns, trying to gauge when the big, huge air conditioning demand cycle will begin. We are in the July contract, so it does make a certain amount of sense, but the reality is we have a long way to go before we actually hit that.

So, with that being said, I believe this is a market that is probably still one you can fade. We just don’t have the weakness to fade quite yet. Overall, I believe this market will continue to see overhead pressure and the first long wick I get to the upside, I’m willing to short.

We just haven’t got it. So maybe it’s a matter of just waiting out the market and trying to sort out what to do next. Overall, I believe this market will find its way back towards the $3 level, but a lot of patience will be needed. I suspect we need a few days of exhaustion to get that trade set back up here.

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