The price range in the natural gas futures market since 1990 has been from $1.02 on the downside to $15.65 per MMBtu on the upside. In March 2016, natural gas traded down to a low of $1.611 per MMBtu, and since then, it has recovered. Natural gas has been trading around the $3 level as of the end of last week after hitting a high of $3.994; the peak since 2014, in December 2016 and right now, I believe that any price under $3 will be a buying opportunity for the weeks and months ahead.
Price weakness over the coming weeks and months will be a buying opportunity
As the daily chart shows, the September futures declined from highs of $3.5060 per MMBtu on May 12 to lows of $2.83 on July 5 and were trading closer to the lows than the highs on Friday, July 28, at $2.923 per MMBtu. There are four compelling reasons why I believe that natural gas is a raging buy on any price weakness over coming weeks. As we are now in the heart of the hurricane season, there is always a chance that a storm that sets its sites on the Gulf of Mexico could lift the price of the energy commodity. I am bullish for the coming winter season and am not counting on a storm but would not mind having a small core long position if one wanders into the Gulf over coming weeks. The bottom line when it comes to natural gas is that the energy commodity has a lot going for it these days as inventories, LNG, technical factors, and the trading history of natural gas all support higher prices in the months ahead.