"Talking Numbers" recently received a tweet from Jing Xiao (@collpandaca) saying:
@CNBCNUMBERS Can you guys talk about natural gas futures?— Jing Xiao (@coolpandaca)
Given the way natural gas has been trading—down 40 percent in the last six months—we thought it would be worth a look.
Since 2005, natural gas supplies have been steadily increasing. And though prices have been volatile the entire way, they are much lower than they were a decade ago.
From June 2013 to May 2014, U.S. dry natural gas production was 23.7 trillion cubic feet. That's 25 percent higher than it was 10 years ago, according to the U.S. Energy Information Administration. Meanwhile, the price of natural gas—notoriously volatile—is down 37 percent compared with this time of year in 2004.
Gina Sanchez, founder of Chantico Global, sees prices falling further. "I believe there are lower prices ahead," she said. "Right now, we're in sort of this trendless state which happens a lot for this time of year. So that's totally normal."
However, additional supplies should continue to weigh down on natural gas prices, said Sanchez, a CNBC contributor. "Natural gas, like anything, is really a supply and demand story," she said. "So as the supply rises, we should expect prices to continue to fall. We're not necessarily expecting a whole lot of demand for natural gas in the fall, so we should see prices falling."
Ari Wald, head of technical analysis at Oppenheimer & Co., thinks the charts are pointing toward a drop in natural gas prices.
"If you want nat gas to move lower, there is some good news," Wald said. He sees the commodity's prices breaking an uptrend begun after its 2012 lows, when it was trading below $2 per mmbtu. As well, natural gas prices have also fallen below their 200-day moving average.
"At best, this is a sideways range," Wald said. "There's risk that this trend begins to slope lower again. The flip side to that is that this has become oversold and unloved."
Wald sees the possibility of natural gas prices bouncing a little bit in the near term because sentiment is the bearish it has been in the past 12 months.
"I would be a seller at that bounce," said Wald. "I see resistance at the breakdown level at about $4.25. Sell it there."
To see the full discussion on natural gas, with Sanchez on the fundamentals and Wald on the technicals, watch the above video.