Natural Gas Price Analysis – Natural Gas Drifts Lower as $2.50 Support Looms

Natural Gas Technical Analysis

The natural gas market has drifted a bit lower during the early part of the trading session on Tuesday as we continue to see a lot of malaise in this market. Traders tend to look at this through the process of whether or not there is enough demand and, quite frankly, there just isn’t at the moment based on pricing and storage numbers. This time of year is typically very poor for natural gas. We are getting ready to roll into the September contract, which isn’t much better, but you’re at least starting to head towards cooler weather.

This is a US-based contract. It really doesn’t matter what happens in the rest of the world unless it serves to mean more exports, and so far, it has not. Ultimately, this is a market that on short-term rallies, sellers will be out there looking to step on it at the first sign of exhaustion.

Key Technical Levels and Bearish Outlook

The $3 level above is a significant resistance barrier from what I can see, at least based on market memory. But we’ll have to wait and see whether or not that ends up being the case if we do, in fact, rally. To the downside, the $2.50 level is an area that’s seen support previously, and it could be again. We’ll just have to wait and see.

As we roll over into the September contract over the next couple of days, the liquidity will get a little bit strange, so I will keep an eye on that. But as things stand right now, this is a very bearish-looking market by just about any metric you measure it by.

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