• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 40 mins WE have a suicidal player in the energy industry
  • 6 hours Washington doctor removed from his post, over covid
  • 5 hours Shale Legs
  • 2 hours TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 54 mins How to Create a Pandemic
  • 1 hour The Most Annoying Person You Have Encountered During Lockdown
  • 1 hour Real Death Toll In CCP Virus May Be 12X Official Toll
  • 6 hours Which producers will shut in first?
  • 3 mins Saudi Aramco struggling to raise money for this year's dividend of $75 billion. Now trying to sell their pipelines for $10 billion.
  • 4 hours KSA taking Missiles from ?
  • 10 hours Trump eyes massive expulsion of suspected Chinese spies
  • 13 hours Did Trump start the oil price war?
Alt Text

Is Europe’s Latest Gas Deal A Win-Win?

The recent gas transit deal…

Alt Text

China To Ramp Up Shale Gas Production At Home

Though the trade war has…

FX Empire

FX Empire

More Info

Premium Content

Natural Gas Analysis for the Week of August 8, 2011

Nearby Natural Gas futures fell sharply lower last week, briefly piercing the low for the year at 3.917 while reaching 3.901 before settling the week at 3.941. The poor outlook for the U.S. economy was the main reason for the weakness. Traders pushed prices lower as supply continued to grow and expectations for a drop in demand continued to grow.

Although the market has reached a perceived extreme low, there doesn’t appear to be any panic selling or capitulation. This typically means the market is being driven by the true forces of supply and demand rather than aggressive speculation.

Natural gas price movement

Over the past month the only factor driving this market higher was a quick short-covering rally to 4.581 because of an excessive heat problem in the Midwest and East Coast. Since this top was posted in mid to late July, the market has gone straight down. Unless there is a hurricane scare in the Gulf of Mexico or a return of the heat, expectations are for a sideways-to-lower trade over the near-term.

Factors Affecting Natural Gas This Week:

• Weather. As the hurricane season reaches its peak, natural gas traders will be watching more closely for increased activity in the Gulf of Mexico. Although only about 7% of natural gas production comes from this region, any production shutdowns or storage threats could trigger a short-covering rally.

• Supply and demand will continue to be the main price driver. Perceptions of a slowdown in the economy will keep downside pressure on prices. Last week another larger-than-expected injection into inventory pushed price below $4.00. More of the same this week could keep the market pinned under this level.

• A general sell-off in equities and commodities is another factor that could drive natural gas prices lower.

• Oversold technical conditions may underpin the market or even trigger a short-covering rally. Even if this occurs, the downtrend is expected to remain intact. A strong rally is likely to give traders another opportunity to short the market.

By. FX Empire

FXEmpire.com is the Forex flagship site of the FX Empire Network. The FX Empire Network provides readers with the most expert and most timely technical analyses, fundamental analyses and news-pieces; this in order to empower them to make for themselves the best possible financial decisions. The FX Empire Network’s other flagship sites include: StocksEmpire.com and CommoditiesEmpire.com.


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News