Amid high volatility during the past two weeks, natural gas looks ready to widen its trading range during the upcoming two weeks as a tropical storm warning is in effect for the Gulf of Mexico from Boca de Catan north to the mouth of the Rio Grande rivers.
On Saturday, the U.S. National Hurricane Center said a disturbance across portions of south Texas and northeastern Mexico through Sunday morning is likely.
The disturbance could strengthen slightly and become a tropical storm before reaching the coast of northeastern Mexico.
This could increase the quantum of wild price swings for the natural gas prices from the weekly opening of the upcoming week that could witness a big gap, down or up, still looks unpredictable.
I find that the changing weather conditions will drive the further directional moves during the rest of August.
Technically speaking, in a weekly chart, the trading range could widen during the upcoming two weeks as the traders will eye the next directional moves and the severity of this tropical storm that will drive the price momentum.
The prices in the daily chart look set to repeat the movements witnessed from Jun. 8 to 17 in the coming weeks. Natural gas closed the last week exactly at the same levels after witnessing a strong reversal just before the formation of the peak of Jun. 8 which was followed by a steep slide that continued to drag down prices to $6.906 on Jun. 17.
Disclaimer: The author of this analysis does not have any position in natural gas. Readers are advised to take any position at their own risk, as Natural Gas is one of the most liquid commodities in the world.