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Natural Gas Futures Slide 6% On Weaker Than Expected Demand

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.

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By Alex Kimani for Oilprice.com

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  • George Doolittle on October 03 2022 said:
    Huge slowdown in US economic growth is hitting natural gas futures prices very hard at the moment. Plus the US economy appears to be deflating as interest rates soar for the Borrow to Spend as Woar Finance Omnibus Budget insanity.

    Great news for the US coal and other ahem *extractive Industries* ahem at the moment. If the Russia Ukraine War suddenly explodes even more than it already has that's really bad news for Mexico as well as the USA might invade to bring order to the Drug Cartel violence there. Sempra Energy is planning upon a massive LNG facility in Western Mexico just South of San Diego. Not sure how the massive and problematic Mayan oil refining commissioning is proceeding tho. If that becomes operational oil refined product prices could plunge along the Gulf Coast USA despite already being half the price as is true of North America West Coast.

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