Natural Gas Price Analysis – Natural Gas Faces Selling Pressure on Rallies

Natural Gas Technical Analysis

The natural gas market continues to be somewhat noisy but in a tight range. That makes a certain amount of sense this time of year due to the fact that the demand for natural gas will be lackluster most weeks, although occasionally in the United States, you do get a little bit of a heat wave. Those spikes in temperature certainly can drive up demand for electricity, which drives demand for natural gas, but those are generally short-lived. Any rally at this point in time, I think, invites selling at the first signs of exhaustion. That’s typically how I trade this market in the summer months anyway.

Seasonal Trends and Geopolitical Shifts

And really, at this point, I wait until we start thinking about winter months to start going long. It’s a very seasonal market that has not broken down that correlation. And, of course, the idea that the Europeans were not going to have enough natural gas coming out of Qatar seems to be fading in the background. As long as Qatar can supply the Europeans with gas this winter, we should continue to have a normal market.

It looks like the Qatari production is going to be at least somewhat close to what it was before the war. And if that’s going to be the case, we go right back to normal trading, and normal trading this time of year is short-term range-bound trading followed by the occasional selling of a spike that shows signs of exhaustion, as it gives an opportunity for traders to take advantage of the well-known behavior of natural gas in the month of July.

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