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Natural Gas at Its Weakest Since May 2016

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.

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Susie Rodgers

Susie is working for the column providing news articles for the natural gas category. She worked in many plants until she decided to be a writer and write about the sector enhancing it with her on hand experiences. She is a very down to earth person and loves to stay at her cubicle doing all the editing. Time management is her story of success, and we are fortunate to have her on board.

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