Natural Gas Price Outlook – Natural Gas Continues to Struggle

Natural Gas Technical Analysis

The natural gas markets have gapped lower to show signs of weakness again during the opening shot across the bow for the week. All things being equal, natural gas continues to be very weak, and I do think that will continue to be the case.

At this point, I am looking for natural gas to find its way down to the $2.50 level, but we’ll have to wait and see how long that takes. If we do rally from here, the $2.80 level is a barrier that should continue to bring in sellers, and then again, you have the $3 level, which is probably even more stringent resistance. The temperatures in the United States are fairly mild at the moment, so you don’t have to worry about a heat wave or electricity demand for air conditioning and obviously heating isn’t a thing right now.

This time of year, it is typically weak for those reasons, so the fact that we’re not even overly hot in America makes it even worse. There will come a point where we bounce and that point is probably coming sometime in the next month or two but we’re not there yet, so I think you continue to look at short-term rallies as selling opportunities in the natural gas market, as it is so weak and quite frankly, so hampered by the lack of demand.

Furthermore, we have to worry about the global economy and if the global economy starts to slow down, then demand for electricity will drop and that will drive down demand for natural gas.

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