Natural Gas Technical Analysis
The market is slightly positive during the early part of the trading session on Monday as we continue to hover around that level. We initially gapped just a touch lower, pulled back to test the crucial $3 level, and then rallied again. This is an area that has been important more than once.
US Weather and Seasonality
All things being equal, the natural gas market is watching weather reports in the United States to determine where we go next. We are in the November contract and getting close to a time of year that brings up demand, but the recent storage numbers still look like we have plenty of natural gas in the United States to satiate any demand.
There are going to be some questions about Europe, whether or not they are going to jump in and perhaps really start to drive up demand, as the supply of natural gas from the Middle East is not necessarily guaranteed, at least not in the numbers that we had seen over the previous years.
This also will come down to how bad the winter is. There is El Niño coming, and that may actually drive down demand. It can in some years, so we will have to wait and see. But right now, it is more of a slightly positive attitude that I see in this market. I would not go so far as to say bullish, but we are getting away from being so bearish. It is a seasonal effect.
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