- The natural gas market is pretty noisy during the trading session here on Monday, initially dropping, but then turning around at this point.
- I think what we're trying to do, some of you technical analysts out there might look at this as a potential liquidity grab.
- That's not what it is. This is natural gas. isn't a market where you can pretend to know where the liquidity is in the sense that it's defined by a line.
It's defined by demand, by support, by supply, by fundamentals. Natural gas is an extraordinarily fundamentally driven market. There are outside players that will get involved when natural gas gets too expensive as well as too cheap.
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Gas is Cheap at the Moment. However…
As things stand right now, natural gas is fairly cheap, but it should be. It's a mild August in the United States. And of course, we have a huge lack of demand due to the fact that electrical demand seems to be down. And there are concerns about a bit of a recession. If that were to play out, especially in the United States, that'd be horrific for natural gas demand. Now, having said all of that, we aren't too awfully far from starting to price in winter demand, which of course should send natural gas higher. So, my speculation at this point is that we end up being in a bit of a range in this general vicinity, somewhere between 320 and maybe 270 or so, $2.70. This is a market that I think remains very choppy and noisy, but if you're a short-term trader, you can certainly take advantage of it. The $3 level will cause a lot of psychology to come into the market as well, so keep that in mind. I think probably the next move is an attempt to rally and a fade of that rally.
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