Natural gas prices have been falling sharply in the last few weeks as the weather has been fairly mild thus far. The inventory report today actually showed a build in inventories, which is unusual for this time of year. That is not good news for a market that is battling an oversupply situation.
Natural gas will have trouble supporting prices in the high 3's unless a cold winter helps burn of some of the excess supplies. The short-term will be difficult for natural gas, but the long-term offers many positives.
Almost every transportation industry is trying to find a way to utilize natural gas. The main problem is the infrastructure. I read a report today about converting cargo ships to run on natural gas instead of deisel. This makes excellent sense, but putting natural gas fueling in every port around the world will be a major task.
Natural gas makes sense on paper in so many ways, but it won't take flight until someone solves the infrastructure problem. We could have cheaper and cleaning burning fuel powering cars, buses, trucks and cargo ships around the world. This offers enormous potential for natural gas, but there is no telling when or if we will get there.
As far as trading goes, rallies should be sold in natural gas. Anything in the 3.75 to 4.00 range looks like a sell to me right now.