Natural gas futures have been in a free-fall for the past week and have spiraled to the lowest levels in the last 3.5 years once recently updated weather forecast models showed unseasonably warmer than usual temperatures in much of the country through the end of next week. Natural gas futures are down .085 cents today currently trading at $2.276 per btu at the New York Mercantile Exchange.
The peak season for natural gas demand starts in November and lasts until March, but the outlook for natural gas speculators is bearish as there may be less demand for the product. Fueling this speculation is the view that the Energy Information Administration’s storage report due for release tomorrow is expected to show a build-up of 75B cubic feet through week ending October 23rd.
“This year’s weather has been abnormally warm in much of the country, and natural gas (futures) prices have reflected this last spring as well,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental assessment of the natural gas futures market. Craney adds, “With inventory levels expected to reach a record amount by the end of this month, it will be a plus for consumers hopefully throughout winter.”
Natural gas futures trend is down with no bottom yet in sight. It will take much for natural gas futures to change direction, it seems, at this point – however, the weather does change without notice…
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.