Natural Gas Price Analysis – Natural Gas Stalls Near $3.00 as Demand Fades

Natural Gas Technical Analysis

The natural gas market initially rallied during the trading session on Friday, but gave back gains rather quickly to show signs of hesitation. Ultimately, I think you have got to look at this through the prism of a market that is just going to remain choppy and have to focus on the idea of the overall demand for natural gas being very weak this time of year. After all, it is hot, but it is not heatwave hot in the United States, and of course, we do not have concerns when it comes to the overall heating demand.

So ultimately, this is a market that remains very choppy, very weak, and very seasonal. And if we do rally, the 50-day EMA sits right around the $3 level, and I think that is a significant area of trouble just waiting to cause headaches. If we can break above there, then the 200-day EMA comes into the picture for a potential barrier as well. These areas could be difficult to deal with, but we would have to see momentum pick up to even have that argument.

Heavy Seasonal Supply Caps Rally Potential

That being said, this time of year typically rallies get sold into, so that is something to keep in mind, because the supply is so heavy this time of year, a quick drawdown just gets refilled. We are trading the September contract, and that helps a little bit, but we still are not in that time of year yet where prices climb and stick for the most part. This market is one that remains quiet in general, and that’s what I expect this time of year.

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