Natural Gas Weekly Price Stalls at $3 as $3.30 Breakout Target Looms

Natural Gas Weekly Technical Analysis

The natural gas market has rallied quite nicely for the week but did stall at the $3 level. It’s worth noting that we rolled over into the October contract this week, so there is a little bit of a boost from that, as traders typically are a little bit more bullish in October than they are in September.

Temperatures will start to drop towards the end of the month and drive up heating demand, but as things stand right now at least, there is plenty of supply, and that supply is nowhere near being truly tested.

With this, the market continues to be very noisy. It does look like we are trying to find the bottom here. I think we probably have some work to do, but I recognize the $3 level as an important area, and breaking above there opens up the possibility of a bigger move, perhaps to the $3.30 level over the longer term. After all, that’s been a swing high going back to earlier this year.

European LNG Demand, Qatar Supply, and Seasonal Bottoming

It is going to be a little bit different this year in the sense that the Europeans may or may not have access to natural gas, and that could be a major influence because they will have to import it from the US, and that would drive up price.

But the scenario in the Middle East is going to be difficult to get a grip on. Recently, we have not seen any attacks on liquefied natural gas terminals or other infrastructure in Qatar, so that does help. Hopefully, they can get that together for the Europeans for export, otherwise it all comes from the US. There is no Russian natural gas at the moment, so this could be an explosive market later this year.

But there are a lot of moving pieces right now that are almost impossible to model. Generally speaking, we start to shift from bearish to neutral to maybe slightly bullish this time of year. We just need the weather to start showing signs of colder temperatures.

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