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Natural gas prices have continued falling with natural gas futures adding to their losses in early trading Monday as the markets fret over receding domestic demand prospects, rising production and possible disruption for American LNG export.
Natural gas prices were down 6.08% on Monday at 10:46 a.m. EST, trading at $6.358, continuing their slide from Friday.
ICAP Technical Analysis analyst Brian LaRose has told Natural Gas Intelligence that the bulls are in trouble because they “can not seem to find their footing, and they need to do more than just prevent natural gas from selling off. If they can not, a more substantial test of the $6.600-6.220 zone, even a drop to $5.730-5.713-5.689 is possible from here.”
EBW Analytics Group senior analyst Eli Rubin has also highlighted the “extremely weak” prices in the physical market.
“While demand was particularly weak with Hurricane Ian, Cove Point LNG offline, and weather-driven demand at a seasonal nadir, the soft market is indicative of further downside risks,” Rubin told NGI.
That said, natural gas prices could soon find a floor with the International Energy Agency (IEA) recently predicting that global gas markets will remain tight next year as Russian piped gas supplies dwindle despite gas demand falling in Europe in response to high prices and energy saving measures.
According to the agency, global natural gas markets have been tightening since 2021 despite global gas consumption declining by 0.8% this year as a result of a record 10% contraction in Europe and flat demand in the Asia Pacific region. However, global gas consumption is forecast to inch up by 0.4% next year.
By Alex Kimani for Oilprice.com
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Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com.