Natural Gas Stays Limp at $2.65 as Mild Weather Cuts Demand

Unlike crude oil or other globally priced commodities, natural gas remains a uniquely American contract. Unless a truly catastrophic event hits the global supply chain, European dynamics have little bearing on the US price.

The bigger structural issue is supply. The United States is sitting on a glut of natural gas, the analyst said. Even as the calendar moves toward winter and traders begin to price in heating demand in later contracts, the sheer volume of stored gas means it will take a significant cold snap to change the market’s direction.

“It will eventually in a seasonal pattern like it does pretty much every year,” Chris said. “But right now, natural gas just is limp and is showing no signs of turning around.”

For traders, the key levels remain $2.65 to the downside and the 50-day EMA to the upside. The market’s path over the next few weeks will depend less on geopolitics and more on the US weather forecast.

For more context on how the broader commodity complex is moving, check out this natural gas analysis of 207K shorts facing a heat test.