Natural Gas Weekly Price Forecast: Weak Demand Drives Another Negative Week

Natural Gas Weekly Technical Analysis

The natural gas markets initially tried to rally during the trading week, but gave back gains to show signs of weakness. Ultimately, this is a market that looks as if it is still very much bearish at the moment. But, historically speaking, this time of year does tend to be pretty weak for natural gas as demand falls through the floor.

In the United States, there won’t be much demand for heating with warm temperatures, but at the same time, it has not been a brutally hot summer, so air conditioning is somewhat tapered off as well. So, with that being the case, we are approaching a swing low from late April, and as we trade the September contract, it’s still kind of in between extremes anyway, as far as demand is concerned. It’ll be interesting to see how things play out in a couple of weeks as we roll over into the October contract.

Seasonal Demand and Range Dynamics

But ultimately, this is a market that has a very seasonal outlook to it. Qatar is buying some of the natural gas that it sells to the European Union from the Americans at the moment, but they are feverishly trying to rebuild their production capacity in that country, and it’ll be a race to see whether or not they get back up online completely between now and the European winter. Last estimates I heard, they were at about 80% production capacity, and that would have been about a month ago, so one would assume things have gotten a bit better.

This is a market that likes to find ranges. We are getting close to the bottom of the range for the last 6 months. That could help technical traders, but beyond that, demand is certainly working against pricing.

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