Natural Gas Market Update: Bears Target Last Line of Defense at $2

The price of natural gas has hit a new low as bears target the last support level at $2. The downward trend began at $6 and gradually declined over two months to reach its current $2.40.

This number represents the final line of defense for the asset, and the market is closely watching to see if it will hold. Many experts believe that a break below this level could signal a continuation of the downward trend and potentially even lower prices for natural gas soon.

Natural Gas: Market Watch

The natural gas market has been facing many challenges recently, and the bears have been trying to push the prices down to an all-time low. If the bears successfully bring the price of natural gas down to $1, it will be a significant victory.

However, the bears must remember that storage capacities also need to support these low prices. Unfortunately, the current storage levels cannot support such low prices.

Despite this, the bears hope to reach the $1 level per million metric British thermal units. On Thursday, the price was recorded at $2.370 per mmBtu, a 24-month low. This number shows that the prices are decreasing, but they still have some journey before reaching the desired $1 level.

The current natural gas market situation is good news for investors and stakeholders alike. The declining price trend has been observed for the past few months, with a 60% drop to the current $2.40 level.

This statement means there is more chance for the prices o drop further. Sunil Kumar Dixit, an analyst in the industry, warns of immediate resistance at $2.47 to $2.56 per mmBtu. If the price falls below this range, there is a high likelihood of a continued decline toward $2.18 and $2.05 per mmBtu.

On the other hand, a break above $2.56 and sustained growth above $2.68 to $2.78 per mmBtu could increase prices towards $2.989 per mmBtu. However, for natural gas to fall below $2 per mmBtu, storage levels must be able to support such low prices.

Factors Affecting Natural Gas Prices

The report from the EIA on natural gas storage in the US shows a 9.4% increase from last year’s levels, reaching 2.583 cubic feet. Despite this, the utility sector in the US is struggling due to a large amount of natural gas taken from reserves by the government, which reached 195 BCF, as well as colder weather that has boosted demand.

These factors play a key role in declining natural gas prices, with the bears targeting the $2 level as the last line of defense for the asset. Therefore, the future of natural gas prices will depend on the ability of the storage levels to support low prices and the impact of government actions and weather conditions on demand.

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