This may spark the next big move in natural gas

As temperatures around the U.S. heat up, investor interest in natural gas is quickly cooling.

The commodity continues to face pressure from record supply and low demand thanks to unusually warm winter temperatures. Natural gas prices hit a new year-to-date low on Monday morning, before making slight gains.

But natural gas may see a big boost as planting season picks up in the spring, according to Phillip Streible, senior market strategist at RJO Futures. The use of natural gas in fertilizing crops bumps up demand.

"The big next move for natural gas may be ... when the farmers start planting," Streible said Friday on CNBC's "Trading Nation."

A warmer summer could also contribute to a rise in natural gas prices, Streible said. Natural gas typically sees a seasonal peak in winter from residential and commercial consumption, and another seasonal peak in the summer from electric power used in cooling. But until supply lowers, Streible said, it's unlikely that natural gas prices will see any sustainable moves higher.

Read More US oil industry buckling up for biggest production cuts

Storage data from the U.S. Energy Information Administration released Friday showed natural gas supply up more than 24 percent from a year ago and 26 percent above the five-year average.

In the shorter term, technician Craig Johnson of Piper Jaffray only sees the commodity heading lower.

"At this point in time, we're still making lower lows and lower highs," Johnson said Friday on "Trading Nation" and "taking out levels we haven't seen in multiple years."

Johnson expects natural gas to find critical support at $1.65 per 1 million British thermal units. If prices break below that level, natural gas could be headed to $1.30 next, a 28 percent drop from where it traded on Monday.


Want to be a part of the Trading Nation? If you'd like to call into our live Wednesday show, email your name, number, and a question to TradingNation@cnbc.com

Videos

Trades to Watch

Trader Bios

About

Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

Read more

Connect