Natural gas continues to slide lower today after yesterday’s pullback from recent highs of 3.318 which we touched late last week. Natural gas is coming out of the ground at record pace as technology increases the daily output.
Major natural gas suppliers buy their winter supply starting in October and into November for the coming winter season. The 7 days of upside we finished last week has the making of large supplier purchase type trends.
There was also news last week that China and the US had struck a deal to run a pipeline from Alaska over to China, while President Trump was visiting Asia. This gave the market a boost, but most likely will never happen, or it will take a long time to complete.
I think traders should be looking for more downside and be willing to sell into any small gains in natural gas if we get a mild upside tomorrow or Thursday off the weekly EIA number.
The daily chart below shows a gap from last week that we should see the market fill before it tries to stabilize and head back higher. The market needs to trade down to 3.113 to fill the gap
Feb ’18 Natural Gas Daily Chart