Natural Gas Price Outlook – Natural Gas Continues to See Selling

Natural Gas Technical Analysis

The natural gas market has fallen pretty significantly during the trading session on Tuesday here, as we continue to try to work towards the $3 level. And the $3 level of course, is a market moving level that has been both support and resistance multiple times in the past. And of course, we have to look at natural gas through the prism of the seasonality.

I understand that this season is a little bit different than most other winters because, quite frankly, we have the scenario where traders are having to deal with the idea that the Europeans are importing natural gas at a much higher clip than they did in the past. So, it does have a major influence on US natural gas. Nonetheless, the demand is dropping, and temperatures are reasonably mild. In fact, I’m sitting here doing this analysis with the window open, completely comfortable.

So, the idea for heating demand or even electrical demand for AC in the United States is a little bit skewed to the downside. If we were to break down below the $3 level, that would obviously be very negative, but I just don’t see that happening easily. I think we are basically in the range and the $3 level is the bottom of that range. If we were to break down below there, I do think that opens up a bit of a trap door, but as things stand right now, I just look for short term rallies to start fading at the first signs of exhaustion, because quite frankly, I think that’s how this market is going to be behaving over the longer term.

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