Natural Gas Price Analysis – Natural Gas Drifting Lower

Natural Gas Technical Analysis

The natural gas market has fallen quite a bit during the early part of the trading session on Wednesday as the ceasefire agreement in the Middle East will have some tensions abated when it comes to energy.

It is worth noting this is the wrong time of year for strength anyway. So, this was just yet another signal to start shorting natural gas. This is a market that will not be able to hold its own without some kind of major external headline or pressure.

Seasonal Demand and Shorting Signals

The $2.75 level looks to be holding as support at the moment, but whether or not that actually remains, who knows. This is a scenario where anytime I see a rally, I’m looking to short, especially near the $3 level, as this market is facing its lowest point of demand in the year, with heating in the United States being a non-existent thing.

The Europeans will probably have to draw some natural gas from the Americans later this year, but again, the key phrase there is later this year. Qatar is working on restoring the flow of natural gas, but the last estimates I heard are that it could take a couple of years to get things back to where they once were.

Natural gas might be a little livelier this winter, but right now we’re just in the dead time of the year. Rallies at this point in time invite selling. I have absolutely no interest in buying natural gas this time of year and will only short it until we get a heat wave in the US or colder temperatures return later this year.

If you’d like to know more about how to trade natural gas, please visit our educational area.