Is a Natural Gas Price Rally Here to Stay? Futures See ‘Bounce,’ Not ‘Trend Change’

While the market regained some ground on Monday, technical analysts warned that sustaining the upward momentum may prove difficult amid ongoing cash market weakness and a heat wave that could arrive too late to prevent a sizable storage surplus by October.

August Nymex natural gas futures settled Monday’s session up 15.2 cents at $3.466/MMBtu. The contract ticked lower early Tuesday.

“August started the week on a positive note, breaking out of the falling channel formation that had been capping gains since late June,” said Patrick Rau, senior vice president of research and analysis at NGI. “That breakout puts immediate support at the top of that channel, around $3.375.”