U.S. natural gas costs have collapsed since Memorial Day. The prompt month NYMEX gas agreement is down over 16% so far in June. Natural gas is at its weakest price stage since May 2016.
Now around $2.20 per MMBtu, gas last year was ~$3.00. No one saw this coming, mainly when costs in mid-November pinned to nearly $5.00.
As well as, the ~$2.53 degree had provided active technical assistance over the past three years, making this collapse completely unpredictable. There are not any contracts on the next curve above $3.00 until January 2024.
Technical assistance and resistance at the moment are respectively at $2.10, $2.15 and $2.23, $2.28. However, the RSI has fallen under 30, that means the market is oversold, and a restricted rebound in worth is anticipated.
With summer beginning last Friday, it has undoubtedly been a subdued beginning to the summer fuel market. Mild climate to say the least: seven weeks in, and five of them have been more relaxed than 2018.
For the week ending June 15, the U.S. climate was 32% cooler than it was in 2018 and 15% cooler than usual. Over the past few weeks, demand is unchanged within the 75-80 Bcf/d range.
Such low prices discourage carrying new output online; however, experts nonetheless expected it to surpass 90 Bcf/d in the upcoming months.
For reference, the most modifications for this year’s fuel fundamentals as compared to last are a lot greater domestic production (up 10%) and LNG demand (up 55%).
Apart from these two, the other fuel sectors are remarkably the same.