Natural Gas Price Forecast: Choppy Trade Holds Near the Floor

Natural Gas Technical Analysis

Natural gas markets are slightly positive during early trading on Monday, as we continue to see a lot of sideways action. That does make sense; we’re getting ready to roll over basically at the end of the week into the October contract, and temperatures in the United States will start to drift a little bit lower late in the month. And the question then becomes: will we have more demand?

Generally speaking, we do, especially a little bit later in the year, as temperatures plummet in the northeastern part of the United States where a huge portion of natural gas is consumed.

Market Outlook

This winter will be a little bit different in the sense that if the situation in the Middle East doesn’t clear up, the Europeans will be, and necessarily so, importing natural gas from the United States. Ultimately, that will have a major influence on this contract if that does, in fact, end up being the case. But right now, I think for the most part we’re just focusing on the fact that demand is fairly low.

Looking at the charts over the last several weeks, it has been more or less a choppy back-and-forth situation. That does make a certain amount of sense, as we’re just simply bouncing along the bottom.

Short-term sell-offs do invite buying dips, but at the same time, any rally that shows just the slightest proclivity to stall has sellers coming back in. And that is generally the way this market behaves in the mild months of the year. And without a serious heatwave in the United States, air conditioning demand is not pushing this market higher either.