Monthly Natural Gas futures declined sharply in July after below normal summer temperatures drove down air conditioning usage and thereby demand for fuel to run the power plants. Record injections drove supply higher, putting inventories at nearly record levels. So the best way to put it is, natural gas prices fell because of rising supply and falling demand.
The sell-off in July wiped out the entire winter premium established earlier in the year when extremely cold temperatures covered much of the Midwest and Northeastern United States. It now looks as if there is going to be an ample supply of natural gas available before the start of the winter heating season.
Fundamentally, unless there is a spike higher in temperatures in the Midwest or East Coast this month, or a lingering high pressure zone, or even a hurricane in the Gulf of Mexico, it looks as if natural gas prices will be under pressure again in August.
Technically, the main range is 7.322 to 2.371. The retracement zone
created by this range is 4.847 to 5.431. This is the best resistance
this month.
The hard sell-off last month was triggered by a break through a
long-term uptrending angle. This angle moves up to 4.4070 in Augusts and
should be considered resistance along with a short-term 50% level at
4.102.
