Natural Gas Forecast 03/09: Eyes $3, Seasonal Demand Builds

(MENAFN- Daily Forex) The natural gas markets continue to watch the $3 level, as we are likely to continue to“wake up” from the negative seasonality.

Natural Gas

Natural gas markets continue to be very choppy during the Wednesday session as traders are starting to focus on the idea that sooner or later, we will have a certain amount of demand out there for natural gas in the United States.

But that being said, it's worth noting that in the meantime we have a market that is doing what it can to try to determine whether or not there's any reason to rise. The $3 level above is a large, round, psychologically significant figure and an area that a lot of people will look at with a potential amount of resistance built into their thinking.

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Ultimately, this is a market that is very seasonal, and I am watching that seasonality right now. You can take a look at the last couple of months and see a bit of a rounding bottom, but I also recognize that we have a massive amount of supply here in the U.S., which is quite a distance from being emptied. In this environment, it does make a certain amount of sense that the market is a little hesitant, but the later we get into the year, the more likely we are to see bullish pressure and European Demand

Furthermore, we have to ask questions as to whether or not the Europeans will have to import U.S. gas later this year, which is a very real possibility, and that could provide a little bit more in the way of support as well.

Overall, I do believe that this is a market that will remain choppy and noisy, but sooner or later we'll get weather in the forecast that drives it higher. This time of year we start to creep a little bit of higher, and I think that's what's going on here. We're just simply starting to drift to the upside as people who are short due to weather are starting to close out their positions.

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