The natural gas bulls, meanwhile, argue that the fuel is oversold, and that a combination of fuel substitution (natural gas for oil), a U.S. economic recovery, and a probable colder-than-normal winter in the U.S. will spark a rebound in demand. The bulls also argue a natural gas bottom is place at/near $3 per million BTUs (MMBtu). Natural gas traded mid-day Tuesday up 4 cents to $4.87 per MMBtu.

Unknown factor: U.S. winter

What could prove to be a pivotal factor in natural gas' price direction? 'Old Man Winter' himself, particularly weather in the Midwest U.S. Unlike the Northeast U.S., where the dominant fuel for heat is oil, a disproportionate percentage of homes heat by natural gas in the Midwest. Hence, if 2009-2010 becomes a classic Chicago winter, natural gas will head much higher, the bulls argue.

Another factor in the bulls' favor: U.S. manufacturing. If inventory-low factories ramp-up production to restock warehouses to avoid being product-short if the economic recovery intensifies, factories will increase their use of natural gas, putting another upward pressure on prices.

Energy Analysis: The U.S. is brimming with natural gas, but that doesn't mean natural gas prices will collapse - far from it. A cold winter can really cause prices to jump, but assuming a normal winter, the price will likely hinge on industrial use. In other words, watch U.S. GDP and industrial output in the months ahead: if the economic recovery takes hold and factories have to increase output, natural gas will head considerably higher, long-term.