Natural Gas Price Outlook – Natural Gas Continues to Attempt a Bounce

Natural Gas Technical Analysis

The natural gas markets have started to perk up just a touch as it looks like we are doing everything we can to turn things around. All things being equal, this is a market that’s getting ready to roll over for the colder months. And it’s probably worth noting that demand isn’t quite there yet, but it should be coming fairly soon as colder temperatures in places like Boston, New York, Chicago start to hit. As heating demand picks up, natural gas usage, of course, will pick up in America.

It’s worth noting that we are rolling over on Friday into the November contract. And now you’re starting to talk about a time of year that quite often is fairly high demand. The other part of the equation, of course, is going to be the electricity demand for an economy. And the US economy, if it is not going to slow down as drastically as some people thought, electricity demand will pick up as well. The Europeans are supposed to be buying $250 billion worth of energy. I would assume some of that is in natural gas, so that could support it as well. And then when you zoom out at the longer term charts, we are basically testing a trend line.

Recently, we haven’t quite gotten there, but we’re close enough that we could turn around and try to rally towards the $3 level. If we can break above the $3.10 level, then we really could take off to the upside. But as things stand right now, I think you’ve got a situation where it’s a short-term pop. It’s probably going to take some work, but we’re getting close to the end of the poorest part of the year for natural gas.

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