Natural gas markets did very little during the trading session on Wednesday as we await the FOMC statement. Ultimately, this is a market that is at elevated levels, so at this point I think it’s difficult to continue to go higher.
Natural gas markets went sideways during the session on Wednesday, as we have reached elevated levels and the $3.05 level has been important more than once. At this point, I think that if we break out above the highs over the last day, it’s likely that we could go to the $3.10 level next. However, if we pull back from here it’s likely that the $3.00 level underneath could offer support. Breaking down below that level unwinds the market down to the $2.90 level next. Overall, I think that the natural gas markets are going to be somewhat bullish at this point as we start to head into the colder months. However, we are overextended so I think you need to look for pullbacks to get involved.
If we did manage to turn on a break below the $2.90 level, that point I think we would go down to the $2.70 level. Overall, I think we continue to see this market bounce around every $0.05 or so. Ultimately, this is a market that continues to see volatility overall, and I think that the US demand will continue to offer a bit of a bid, but by the time we get to the month of January, is very likely that we are going to see sellers jumping into this market yet again as we continue to consolidate overall. I think short-term trading is about all we can do in this market right now, with a focus on every nickel.