Natural Gas Price Forecast – Muted Demand and High Supply Cap Natural Gas at $2.75

Natural Gas Technical Analysis

The natural gas market continues to be somewhat quiet as we are just hanging around the $2.75 region. That makes a certain amount of sense considering that we are at relatively low levels, and this time of year does tend to be fairly quiet as demand will be weak under most circumstances.

We do not have a major heat wave in the United States at the moment, so demand for air conditioning isn’t spiking, nor is there demand for heating, obviously, this time of year. So that tends to make natural gas a little soft. Furthermore, we have an abundant amount of supply, and with that, it’s difficult for prices to really pick up, despite the fact that Qatar is now starting to buy natural gas from the United States to fulfill its contracts with Europeans.

Seasonal Shifts and Contract Rollovers

The question now will be what happens when we roll over into the October contract in a couple of weeks. We start to think about cooler weather in the Northeast here in the United States. That’s generally when we have a couple of days here and there that we have to start turning on the heat.

So that is typically the beginning of a little bit more bullish momentum. The situation in the Middle East could get out of hand pretty quickly, and if Qatar’s natural gas production gets hit again by Iranian missiles, that could throw things into disarray, especially in the winter.

Ultimately, I am a seasonal trader here. We’re still in a pretty weak time of year, so I don’t like natural gas overall, but there are a few months coming up that tend to be very bullish. As things stand right now, any rally would probably have to contend with the 50-day EMA at $2.90, and then the $3 level as potential resistance.

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