The natural gas markets were somewhat positive early on Monday, as traders are looking forward to the rollover on Thursday. At this point, we are getting closer to a potentially bullish seasonality.
Natural Gas
The natural gas markets have been somewhat bullish in early trading on Monday, despite the fact that we still have plenty of supply in the United States that will suppress pricing. The 50-day EMA sits just above, and it's worth noting that we are getting fairly close to rolling over into the next contract, which is the month of October on the 27th, so 3 days from now. And that could be part of what's happening here. People are closing out short positions.
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Generally speaking, October does tend to be a little bit better than the September contract, which we're just closing out, and that does make a certain amount of sense. Temperatures start to drop a little bit. It'll be interesting to see how this plays out.
Right now, we have plenty of supply in the United States that remains a major deterrent to rising prices, but we also have to start thinking about the possibility that the Europeans may have to import natural gas this year, and that could give us a little bit of a boost. The most recent EIA reading of natural gas storage in the United States was higher than anticipated, meaning there's more supply, and that is still a bit of a major problem for natural gas bulls.
Contract Rollover and Price Boundaries
Currently, I see this as being between $2.60 and $3. Right now, we're at about $2.80, which is an area that's been resistance as well. Short-term dips could be buying opportunities, but really, the big move in natural gas is probably still several weeks away, at least not until we start focusing on autumn and possibly winter.
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