Natural Gas Price Outlook – Natural Gas Continues to Drop

Natural Gas Technical Analysis

The natural gas market has fallen a bit during the early hours here on Tuesday, as we continue to see a lot of noisy behavior overall. Ultimately, this is a market that I think is going to test a major trend line that goes back to February of 2024. The market bouncing sometime soon would make a certain amount of sense, although I’m not necessarily suggesting that I’m going to buy it right away, but we are getting close at the end of the week.

We will start to change over into the November contract. And as you go into November, you should see more demand. There are some issues out there, such as the fact that summer was hot for a while, but we didn’t have massive heat waves in the United States. So, air conditioning did not chew up a lot of the supply.

If the global economy is slowing down, or more specifically, if the American economy is slowing down, that means we’ll need electricity produced in smaller quantities and therefore natural gas may not be as heavily burnt off. That being said, as we roll over into that November contract, we should see cooler temperatures start to get priced in. So, it is more likely than not only a matter of time before we get a bit of a bounce. What I’m looking for at this point is some type of bounce and a short term V pattern that I can start buying into.

I do think we will probably finish filling this gap that I have been talking about down to the $2.72 level. So, it’ll be interesting to see if that holds. If that holds, that could be where we start to turn things around. The $3 level above should be significant resistance right along with the 50 day EMA. So, I don’t think it’s going to be an easy recovery, but I am starting to look for colder temperatures, higher prices.

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