Natural gas futures are trading at this month’s mid-range and at two-week lows as trader’s eyes seem to be focused on short-term domestic weather in order to estimate demand for the fuel. Natural gas futures are down slightly today currently trading at $2.75 per BTU at New York’s Mercantile Exchange.
It might not only be weather concerning the natural gas trade, but speculation that power and utility plants may switch from clean coal to clean natural gas because of such low prices. Most consumers may not be aware that natural gas is used in about 25% of domestic electricity generation.
“Natural gas (futures) prices may be low now, but if US power companies and utilities convert (or, commit) to natural over the summer, it can be a game changer for the natural gas (futures) charts,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his view regarding the fundamental assessment of the natural gas futures market. Evans added, “Natural gas (futures) have been hovering at these lows for the past four/five months and a hot summer with power companies switching may be the catalyst to jump-start this market.”
The trend for natural gas futures remains down with possible bottoming taking place. A sustained natural gas futures breakout about last month’s high near $3.20 per BTU could have this market in an uptrend – but low prices are great for the end-users.
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