Natural Gas Price Analysis – Natural Gas Continues to Struggle

Natural Gas Technical Analysis

The natural gas markets continue to see a lot of noisy behavior as the $2.75 level looks to be the short-term floor. The $3 level above current trading is going to remain an area of interest for what I see, and as a result, I think it’s worth paying close attention to it. If we get anywhere near $3 and see signs of exhaustion, it could be a shorting opportunity, but there’s also the argument that if we break above there, we could get all the way to the 50-day EMA.

That would be a very bullish turn of events, but we’ll just have to wait and see if that is an actual possibility. Traders continue to see a lot of noisy trading, but a lack of demand for natural gas, I think, will be the biggest factor here, as this time of year is just typically horrible for natural gas.

Seasonal Demand and Market Outlook

The Americans aren’t burning it for heating and it’s not exactly like it’s hot yet either, so air conditioning demand isn’t really high either. So, with that, this time of year tends to be very small moves with a generally negative market, but we’ll have to see how that plays out.

I think you’ve got a situation where if you are patient enough, you will probably get rewarded, but this is a market that I would not expect a lot of big moves in.

I know a lot of you have been writing me about the action in natural gas not matching up with what’s going on in the Middle East, but you have to keep in mind this is an American contract, it’s not a Middle Eastern contract, so it is pretty flat at the moment.