Natural Gas Price Analysis – Natural Gas Stalls near $2.90 as Summer Demand Fades

Natural Gas Technical Analysis

The natural gas market initially fell a bit during the trading session on Friday, but turned around to show signs of life. It looks as if the $2.90 level continues to be a bit of a magnet for price, and therefore, we need to pay close attention to it.

If the market were to break back above the $3.00 level, then it’s possible that the market goes looking to the 200-Day EMA, possibly even higher than that. This is a market, though, that is very cyclical, and you need to pay close attention to the reality that demand just isn’t that strong without some type of heatwave. Later in the year, you tend to get more demand due to heating needs in places like Boston, Columbus, Pittsburgh, Buffalo, etc.

Seasonal Demand Doldrums Anchor Near-Term Pricing

The contract that we’re trading right now is August, so it’s all about heatwaves, and the heatwave that we have in America just hasn’t been enough to draw down the storage yet, so therefore, you have lower pricing. This continues to be the overall attitude of the markets in general.

It is a cyclical market, and therefore, I think that a lot of people are very hesitant to put a lot of money into buying natural gas, at least right now. But as we go into the latter part of the year, typically speaking, you do see buyers jump in when you start to talk about maybe the October contract, you start to see a little bit of life. Right now, though, we’re in the lowest part of demand for the year.

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