Natural Gas Price Ready To Heat Up?

| July 23, 2015 | 0 Comments

natural gasNatural Gas Price Forming A Bottom?

Anyone who follows the energy markets will tell you the same thing…

It has been an exceptionally rough year for natural gas and the companies producing it.

Over the past 12 months, the price of the gaseous commodity has fallen 25%.  With natural gas currently trading near multi-year lows at $2.00 mmBtu, it should come as no surprise that natural gas exploration companies are falling on hard times.

But there may be some relief in sight soon.

Let me explain…

There a number of fundamental factors, and a technical one as well, leading me to believe the natural gas price will see bullish price action soon.

First of all, natural gas exports are scheduled to start in a few months.  Cheniere Energy’s $LNG Sabine Pass facility is on track to start overseas deliveries sometime this quarter or early in the fourth quarter.

Overseas LNG exports are a source of demand the US natural gas market has yet to see.

But that’s not all…

The Summer of 2015 is turning out to be a toasty one.  The Eastern and Central US is in the grips of a suffocating heat wave.  Temperatures soaring into the mid-90s and 100s across various states have consumers cranking up the air conditioning.

Of course, with higher power demand comes higher natural gas usage.

And according to the NOAA, hot temperatures are going to stick around for a while…

Natural Gas Price, NOAA 6-10 day outlook

As you can see in this 6-10 day outlook, the entire Eastern half of the country will likely see above average temperatures.

But here’s what’s really piquing my bullish interest in natural gas…

Over the past few months, the commodity has put together a promising technical pattern.

Take a look…

Natural Gas Price, A Chart Of Natural Gas

Notice how the green trend lines in the chart above are converging to a point on the right side of the chart.  This is called a triangle consolidation pattern.  These formations tend to result in an explosive price reaction when either trend line is broken.

As you can also see, natural gas is sitting just beneath the top green trend line.

If the commodity can break above $2.95 mmBtu in coming sessions, we may see bulls take control of the market, possibly sending it to the $3.20 area or higher. 

How do you capitalize on such a situation?

I laid out the best energy non-leveraged energy focused ETFs the market has to offer here.  If you’re looking to add a bit more juice to your gains, consider the leveraged natural gas ETFs in this article. 

Of course, I always recommend you follow a plan with each and every trade.  In case you don’t have one, I put together a basic one for you here. 

Until Next Time,

Justin Bennett

BIO:  Justin Bennett is the head commodity research analyst at Commoditytradingresearch.com.  With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them.  Sign up for our free reports and commodity newsletter at https://commoditytradingresearch.com/free-sign-up.

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Category: Energy, Natural Gas

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.

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