Natural Gas Price Analysis – Natural Gas Jumps to Kick Off the Week

Natural Gas Technical Analysis

The natural gas markets have gapped a little bit to the upside in early trading on Monday as traders continue to look at this through the prism of a market that is extremely oversupplied. It’s difficult to imagine a scenario where we suddenly see a spike in natural gas without some type of actual external event occurring.

This time of year is typically very soft for natural gas, and of course, the United States has more than enough, so in this environment, it just makes sense that anytime we rally, you have to be thinking along the lines of shorting the market.

Demand Outlook and Market Opportunities

There will be more European demand eventually coming from the hub in Louisiana, but as things stand right now, it’s a pretty low demand time of year there as well, so we’re not really going to see that follow-through quite yet. This is something that won’t be a major factor for some time.

Ultimately, though, this is a market that anytime it bounces a bit, you’re looking for short-term selling opportunities because the demand just won’t be there, and of course, it really won’t until we get some type of heat spike in the United States later this summer. Ultimately, though, I think this is a market that this winter could be very interesting with all of the damage done to the LNG infrastructure in Qatar. With this, we will be watching how quickly production can be brought back to market in the Middle East as well as other regions. That being said, this is still a market that is weak.

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