Natural Gas Price Forecast – Natural Gas Continues to Consolidate

Natural Gas Technical Analysis

The natural gas market has fallen a bit during the early part of the Tuesday session. I think this continues to see a lot of questions asked about overall demand, as we are in that weird time of year in the United States where traders have to weigh the massive abundance of supply.

At the same time, the weather is not necessarily cooperating, at least not around the clock. At night, it is getting fairly cool, but, for example, today in Columbus, it is going to be 83 degrees. So, heating really is not a concern. I have yet to turn on the heat for the year.

Winter Demand to Take Center Stage

At the end of the month, we will be rolling over into the December contract, which will cause quite a bit of demand to come into the picture. But really, at this point, we need some type of cold weather to get this thing going.

As time goes on, people will start to think more and more about winter. Having said that, we have rolled over from the time of year where it is all bearish to neutral to slightly positive. The question is, how much supply can we cut? Right now, we are at about 5% over the 5-year average of storage. That could be blown out with a couple of winter storms, but we are obviously nowhere near that.

The $3 level, at this point in time, I think is trying to act as a floor. The $3.30 level is a bit of a barrier. If we could get above that, then it is possible we might have a little bit of runaway there.

With this, I think we have a range-bound market with a little bit of positivity underneath it.

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