BREAKING: NATGAS plunges nearly 5.0% despite supply concerns

NATGAS prices fell sharply on Wednesday despite gas output in the Appalachian region, the top gas-producing basin in the U.S., dropped by a record amount as Winter Storm Elliott has wreaked havoc across Pennsylvania and Ohio. Low temperatures caused many wells to freeze over, equipment damages and creating mechanical issues at pipeline infrastructure. As a result gas output plunged over 50% in Ohio and by more than 20% in Pennsylvania. In total gas supply in the Appalachian region tumbled by 27%, or by 9 billion cubic feet, compared to average levels, which is the biggest decline  on record in data since 2013 according to BloombergNEF.  

On the other hand, demand from Europe is dwindling and prices returned to pre-war levels. Gas prices in Europe fell around 75% below August high, as record LNG imports, mild weather and fuller-than-normal stockpiles ease concerns about shortages. The data from Gas Infrastructure Europe showed Germany's gas storage to be at 88.2% full as of Tuesday, up some 1% from the week before, while the EU average remains at 83.2%, above the five-year seasonal average. Meanwhile gas transfers from Russia sent through Ukraine remain at stable level and weather forecasts indicate that temperatures should remain above average in the first days of January

NATGAS price extends losses and is approaching recent lows at $4.75, which coincides with 61.8% Fibonacci retracement of the upward wave launched in March 2020. Should a break lower occur, downward move may deepen towards next support at $4.30, where lows from February 2022 and lower limit of the 1:1 structure are located. Source: xStation5