Natural Gas Price Outlook – Natural Gas Continues to Focus on Spring

Natural Gas Technical Analysis

The Natural Gas market gapped lower to kick off the trading session on Monday as it looks like we are starting to get to the end of winter. Now, having said that, I think you’ve got a situation where people are going to be very cautious about shorting the market right now, but I certainly would not be a major buyer of this market. I do think that somewhere between $3.50 and $4 above should end up being a significant barrier to overcome. And I am looking for signs of exhaustion to start shorting this market.

Because we also find ourselves in a situation that despite the fact that it is very cold in the United States at the moment, the reality is that 30 days from now, we’re going to be seeing natural gas demand just fall off of a cliff. In fact, we are just a couple of weeks, week and a half, a couple of weeks or so from rolling over to the April contract.

Now, April can be cold in the US. But really, this means that we’re in the last couple of weeks of elevated demand as far as heating is concerned, there will come a point in the summer where we might get a heat wave and perhaps it elevates demand again. But this is a typical trade. You typically see natural gas rise all winter. And then once we get through the cold weather season, we start to see it fall, and then eventually it falls rather precipitously. It is because of this that I’m looking for signs of exhaustion to continue to build a short position.

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