Natural Gas Price Analysis – September Rollover Threatens $2.50 Support Test

Natural Gas Technical Analysis

The natural gas market is trying to rise a bit in early trading, but it just doesn’t have the momentum necessary. All things being equal, this is a market that is in the midst of rolling over into the September contract, which isn’t necessarily a strong contract most years. It’s not quite cold enough to drive up the heating demand necessary to elevate price significantly, and of course, we haven’t really had too many major heatwaves this summer in the United States, so the supply really hasn’t been taken down drastically.

All things being equal, this is a market that is very bearish, but if we were to rally, I would not have any qualms whatsoever about fading signs of exhaustion. That is my typical play this time of year, as there is just nothing along the way of strength, and I am not sure that would be easy at this point.

Contract Rollover and Seasonal Storage Pressures

Now, as we roll over into later contracts, generally speaking, prices rise as futures markets predict that there will be more demand, and as somebody who lives in the United States, I am sure there will be once we get to the colder time of year. We just aren’t there yet.

The $2.50 level underneath is an area that’s been supported for some time and could be a floor. Right now, though, it looks like the market’s just kind of meandering around trying to figure out whether or not there’s anything out there that’s going to drive down the massive amount of supply that currently sits in tanks right now.

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