The commodity is currently close to 50% below where it traded this time a year ago. Currently down 22% in 2019.
According to the U.S Energy Information Administration, the prices seem to be pressured by excess supply. Inventory has been building up, warmer winter and U.S production reached new records.
According to other sources, from September temperatures have increased by 5% more than last year but still 20% below the 5-year average. The summer period was rather bullish but the reason for the aforementioned excess supply is what’s keeping the prices at a low. The changing weather patterns are affecting the prices also.
Weather chief meteorologist Brian Lovern expressed:
From here, we feel that we will have a lot of volatility in the weather pattern, with some warming seen as we move into December (a big reason prices fell so much this week), but there will be more cold threats either late in December, or into the middle portion of winter.
According to Lovern, he predicted prices would go as low as $2.25 during a cold winter and right now Natural Gases are trading at $2.26, at time of writing. He also predicted that a rise in temperature would be disastrous and could send the prices under $2.00.
According to some analysts, they like to view the selling action as a Black Friday sale for Natural Gas even though the price is believed to rise early next year:
With exceptional volatility this fall and the recent large speculative short positions really pushing prices lower, this recent dip in prices may have run its course. I believe you have to respect the range and view the recent selling action as a Black Friday sale for Nat Gas.
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