Natural Gas Price Outlook – Natural Gas Continues to Find Selling Pressures on Rollover

Natural Gas Technical Analysis

Natural gas will appear as a huge jump higher during the trading session here on Wednesday, but keep in mind, we just rolled over into the September contract, so it does skew the charts in the futures market. You can see that we have started falling almost immediately and from a higher level. That’s exactly what you would expect because there will probably be a touch more demand for natural gas in September, but not enough to make it a bullish market. I still believe that at this point in time, you have to look at the natural gas market as one that is a sell the rally type of situation.

There’s no reason to think that natural gas is suddenly going to take off, although this winter could be a bit interesting, mainly due to the fact that the Europeans are on board to buy quite a bit of US energy. What part of that is natural gas? I don’t really know at the moment. I think that’s still being worked out, but it should have somewhat of a positive influence. In the meantime, I look at the $3 level as a major ceiling that probably won’t be broken anytime soon. And therefore, I look for signs of exhaustion that I can start selling like we had seen early in the session here on Wednesday.

I still think it’s very possible that we drop toward the $2.50 level, where I think somewhere around there will probably start to bottom out. The month of September again might see a little bit of an uptick, but it’s not a major high-demand month, so I’m still in the bearish camp.

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