Natural Gas Price Analysis – Natural Gas Falls Yet Again

Natural Gas Technical Analysis

The natural gas market continues to see a significant amount of downward pressure, and I think given enough time the market is probably going to test the $2.50 level.

With this, I think it makes a lot of sense that there would be a little bit of noise in that area. But if we were to break down below that level, we could even open up a move down to $2.25. Most people just don’t understand how bearish things really are in the natural gas world right now.

Demand is at the lowest point it is during the year for the most part. Temperatures in the United States are very comfortable. I am sitting here doing my analysis with the windows open at 8:00 in the morning.

Storage Capacity and Seasonal Demand

The demand for natural gas will pick up if and when we get heatwaves, but as things stand right now, we just don’t have them. And there is plenty of natural gas in storage. In fact, they are starting to run out of storage space.

In this environment, any rally invites selling, but the moves aren’t going to be that huge because we have fallen so far in just really 2 or 3 months. So, most of what we are looking at here is if we get some type of extraordinarily hot weather and a drawdown of significance, then you look for signs of exhaustion to sell.

Otherwise, there is no way you could buy natural gas unless you have the ability to do it in a manner that you can simply wait to get paid. Something like an ETF or something, but even that, you probably have a few months before any lively upward action occurs. This is a market where if it pops up, you want to step on it and start shorting.

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