Natural Gas Price Analysis – Natural Gas Drifts Lower Early

Natural Gas Technical Analysis

The natural gas market has been slightly negative in the early part of the Wednesday session, as the $3 level, of course, will attract a certain amount of attention. The natural gas markets are rolling into spring; we are already in the April contract, so with demand dropping in the United States, that will have a major influence on what happens in general when it comes to natural gas. In fact, the next busy season—the next high-demand season—probably won’t be until the middle of summer, when you are talking about running air conditioning in the U.S.

The market for me still remains one that you want to sell on signs of exhaustion, and therefore, I think this is an area above near the $3.50 level that I would love to start shorting. But the market is going to have a little bit of an external influence in the sense that the Europeans may have some issues with supply, so the question then becomes, do they come to the U.S. for natural gas? They probably will, so that will drive the price up a little bit, but it’s probably not enough to cause anything crazy, at least not as things stand right now.

Fade the Rally

I think this remains a short-term fade the rally type of in-and-out situation for most traders. I don’t have any interest in buying natural gas; it’s just not resilient this time of year under normal circumstances, but we will have to keep an eye on the Europeans and what they are doing about supply.

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