Natural Gas Price Forecast – Massive Storage Caps Natural Gas Between $2.60 and $2.80

Natural Gas

The natural gas market has rallied slightly during the early part of the trading session on Tuesday, showing signs of life again, but ultimately, this is a market that is going to continue to be a little bit noisy and a little bit pressured due to a lack of demand this time of year and huge overall storage out there willing to fill any holes in demand that we get in the short term.

This is the wrong time of year to be overly concerned about heating, and air conditioning can make it spike a bit here in the United States in heat waves, but it hasn’t been particularly bad this year, and the abundant storage makes that an even taller order than usual. That being said, we have been consolidating for a while, and there’s really nothing on this chart that suggests that there won’t be more of the same. We’ll just have to wait and see how that plays out.

Summer Consolidation and Fall Contract Horizon

Market participants continue to see this range as a little bit of fair value between $2.60 and $2.80, and until that breaks out in one direction or the other, short-term trading seems more likely than not, as there is no real clear reason to get moving at the moment.

Ultimately, this is a market that, as we roll into the October contract in a few weeks, starts to think about the fall and the colder temperatures. There’s somewhere in the next couple of months we’ll drift into that regime of more demand and less supply, but we’re not there yet.