Natural Gas Now Stabilizing after Bearish Trend
Natural gas prices swung upward on Wednesday, signaling what could be the beginning of a bull trend or at least the end of the bear one.
Despite a drop today of 6%, natural gas is looking more promising and price stabilization could be close.
A long bear trend has kept the natural gas prices falling since the beginning of November of 2023. The price corrected in late December and early January, but all too briefly. After a long decline from there, the price ticked up on Wednesday and made back some of the losses.
That upswing did not hold for long, but it was enough to signal that the price may be getting ready to flatten out and stabilize for a while. That’s what analysts are predicting and traders are hoping for.
The price surge was caused primarily by Chesapeake cutting their gas production. The price jumped as a result, since it would mean a diminished supply to help get closer to the limited demand.
Key Indicators to Predict Natural Gas Prices
Traders should look at inventory levels of natural gas supplies. As those supplies diminish, the demand will go up and the price will increase. They should also be watching weather patterns which will affect the cost of gas as well. If weather is inclement in shipping lanes and in areas where gas is collected, the supply will be affected and the price increases.
Currently there is an ample supply of and storage for natural gas. Demand is down because much of the world is getting ready to enter the warm part of the year, when natural gas and heating are simply not that necessary.
The week could finish out higher than it started, if the upswing is not a fluke but part of an emerging price trend. The price is at $1.60 and could trade at $1.79 over the short term but could also go as low as $1.52. Just a few cents above the current price will help attract more buyers and help keep natural gas competitive in the commodities market.
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