Natural Gas Price Forecast – Natural Gas Continues to Consolidate

Natural Gas Technical Analysis

The natural gas markets have been bullish over the last couple of days, but we are still at extremely depressed levels. I do think that we’re in the midst of trying to form some type of basing pattern, and it’s probably worth noting that the $2 level is a large round psychologically significant figure that typically does have a bit of support attached to it in this market. At this time of year, we aren’t exactly bullish most of the time, although the occasional heat wave can drive up demand in America.

Most traders are simply building a position for fall when they will sell natural gas, which is exactly what I’m doing with no leverage. My position is still small, and I do think that we have plenty of time, but every time we dip, I get involved in an ETF that I use to trade natural gas. I don’t use leverage because I don’t know when we will start to see cold weather.

European demand of course sometimes gets into the fix, but most things being equal this is all about the United States and therefore you have to be cognizant of weather in New England. The weather in New England right now does not demand much in the way of heating and it’s not like there’s a major drought, although we have seen hot temperatures in the southern part of the United States. So while that could drive up demand a little bit typically, when you see spikes is when the population centers start to see massive amounts of heat in the summer. The easiest trade of course is to simply buy natural gas and sell it sometime in the late fall or early winter. It’s something I do every year.

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