Natural Gas Price Analysis – Natural Gas Drifts Lower into the Weekend

Natural Gas Technical Analysis

Natural gas has fallen a bit as we head into the weekend, and perhaps more importantly from a technical analysis standpoint, are hanging around the 200-day EMA. The question now, of course, will be, is this a nice selling opportunity? Were we always destined to struggle here as the previous swing high, and one back in late March, had failed right around in this neighborhood? You could be looking at a bit of a double top; we’ll just have to wait and see.

But it’s hard to tell, this time of year typically there isn’t a massive amount of demand, although temperatures are somewhat warm at the moment, the reality is it’s not a massive demand picture quite yet. We are trading the July contract in the futures market though, and that could change some of the expectations.

Certainly, there will be some point in time in July when it’s extraordinarily hot, but right now the United States is seeing low 80s, and while that is hot, it’s not outrageously hot. This time of year, that’s maybe just a few degrees above normal and most people really don’t think too much of it.

Seasonal Demand Dynamics and Technical Support Horizons

So, with that and the fact that there is a massive amount of supply in the United States, I do think there is a significant amount of downward pressure here. That could open up a move back to the $3 level where I see the 50-day EMA coming into the picture to offer some support. Ultimately, I don’t like buying natural gas this time of year, and we might be seeing a nice selling opportunity.

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