Natural Gas Weekly Price Analysis – Natural Gas Continues to See Overhang

Natural Gas Weekly Technical Analysis

The natural gas market has rallied quite significantly during the week but gave back all of those gains as we are now below the $3.00 level again. Natural gas will continue to struggle overall, and I do think it’s probably only a matter of time before we drift lower. We had a little bit of a bump earlier in the week to the upside, but that was 1 or 2 hot days in the United States—not enough to destroy the overall supply.

Key Price Levels and Seasonality

With that being the case, I think you’ve got a situation where traders are going to continue to look for a drop to the $2.60 level pretty quickly. If we do rally from here, I will watch the $3.20 level. That’s an area that’s been important in the past and, of course, goes against the actual demand equation.

Eventually, demand will shift and this will become a very bullish market, but that’s probably a few months down the road. Furthermore, there are questions about whether or not the Europeans will have natural gas, so later this year it could get really wild over here in this market.

As things stand right now, I just don’t see any reason for it to go higher until we get some type of heatwave in North America. I do not expect this market to break down below $2.50, though. I think that’s probably a pretty hard floor at the moment. Any move below there would be very surprising to say the least.

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