Natural Gas Dips Below The $2 Support - 10% Down For The Week
The US natural gas futures have closed the recent week in the red once again. When compared with the closing of last week, natural gas has lost almost 10% of its price value which highlights the consistent bearish pressure.
To make things worse, even the front-month contract is showing strong bearish pressure as it dipped below the $2 support. This further intensifies the case of new lows in natural gas in the next few days.
Natural Gas Delivery Contract For May Is $2.011
For the month of May, the natural gas delivery contract price is $2.0110 after the settlement. Before closing for the day, the security was down by 6.7% for the day which equals 14.4 cents.
And if we look at the weekly progress, the front-month contract is down by 9.3%. Similarly, a net loss of 33% was registered in a 5-week period.
According to technical readings, natural gas prices could stage a rebound in the next few weeks. But for that to happen, the front-month contract must stay above the $2.17 price level.
According to analysts, sustained momentum above $2.17 will open the doors to the $2.30 resistance level, followed by $2.60.
The recent drop in gas prices has come at a time when the US's natural gas storage is only a little below the forecast levels. The reason for this minor difference is due to strong heating demand amid cooler-than-normal weather conditions in the country.
Overall, a reduction of 23 billion cubic feet was found in the natural gas storage of the United States of America. This means that the overall balance of natural gas now stands at 1.83 trillion cubic feet.
For the most part, the withdrawal of 23 bcf from natural gas storage was expected by the market experts. In addition, the storage draw of the 2022-23 season will officially end with this!
And last but not least, the winter is almost gone, which could push natural gas prices further low! After all, the demand for heating in houses and other buildings will also go down significantly.