Natural Gas sideways during Wednesday

The natural gas markets going back and forth during the day on Wednesday continues the choppiness that we have seen over the last several sessions, and I think that when we look at this market, I think that if we break down below the $2.68 level, the market will be free to go much lower, perhaps reaching down to the $2.65 level, followed by the $2.60 level which is much more supportive and significant on the longer-term charts. I think that if we were to rally from here, we would need to break above the $2.75 level to reach towards the $2.80 level above, and that of course would be a major ceiling for pricing in this market. I believe that the oversupply of natural gas is a long-term issue, and therefore it’s only a matter of time before the sellers return every time we rally.

I think that although the natural gas markets tend to look at the next couple of weeks for the demand picture, ultimately it’s likely that the $2.80 level will be difficult to break above, but if we did I think that the market will probably have a short-term pop that it will follow to the upside but no higher than the $3.00 level, which has been a major barrier more than once. As we go into the warmer months of the year in North America, it will probably drive demand down even further. We also have a strengthening US dollar, so that of course puts bearish pressure on commodities in general.

NATGAS Video 10.05.18