Natural Gas Price Analysis – Natural Gas Stalls Below $3 Resistance

Natural Gas Technical Analysis

The natural gas market has gone back and forth during the early part of the trading session here on Monday but looks as if it is trying to be somewhat positive. That’s a good sign, but the range that we are trading in in the natural gas market is all but minuscule as traders are trying to sort out whether or not there’s going to be enough demand.

The supply of natural gas is certainly pretty firm right now, and this time of year does not tend to draw down a lot out of the supply in the United States as, although occasionally you get a heatwave; the reality is you do not need much in the way of heating. So with that being the case, the market looks very choppy sideways.

Key Technical Levels and Demand Dynamics

I do think that the $3 level above will probably continue to cover some type of psychological need for the market. It’s also worth noting that the 50-day EMA sits there as well. Typically this time of year I short rallies that show signs of exhaustion.

It’s hard to imagine that suddenly there’s going to be a massive demand for natural gas, but we are in the September contract, so we’re getting closer. European demand for natural gas, whether or not that can be filled by Qatar, remains to be seen. For what it’s worth, the Qataris are buying some natural gas from America to fill their orders, but it’s not a dire situation quite yet. Therefore, the market, at least in my observation, this time of year is behaving exactly as we would expect.

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