Natural Gas Seasonal Price Trend - Seasonals Suggest Current Weakness Should Be Bought

The seasonal price trend chart for natural gas suggests that current weakness in the market should be bought as new price lows ahead of winter are not expected.

The chart shows the price trend for the current year (green line) in conjunction with the 3- year (blue line) and 5-year (black line) trends.

This is the time of year when the market becomes quite volatile as prices swing between weather forecasts which are currently bearish and storage withdrawals which have been a supportive factor over the past 2 weeks.

But while last week's 162 Bcf withdrawal tied a record high for November, it was not enough to overwhelm near term bearish weather forecasts.

Selling in other markets such as crude oil may have also spilled over into the natural gas.

The biggest risk in the natural gas market now is to the upside.  Sellers have once again pushed the market back under 4.000 but it is highly unlikely new price lows will be set before winter.

With this current winter starting out colder than expected, any subsequent changes in the weather forecast will quickly reverse the price fall.

Bottom line - Current weakness is a buying opportunity.