NATGAS with 5% pullback due to new weather forecasts

NATGAS in the US is retreating quite significantly following new weather forecasts, which indicate that temperatures could drop significantly in early August, even below normal. Currently, despite higher-than-normal temperatures, gas consumption is not higher than normal. High production is responsible for the recent decline in gas prices. Furthermore, high supplies in Europe are alleviating concerns about insufficient supplies before the winter season.

Weather forecasts are changing significantly. A significant drop in temperatures from the northeast is visible in early August. Source: Bloomberg Finance LP, XTB

The decline in the November 25-November 26 spread indicates significantly lower demand for gas in the upcoming winter season than next year. This spread could be a determinant of the current price. If the spread were to rebound, a significant impact on the current price could be expected. Source: Bloomberg Finance LP, XTB

The price is falling after rollover (today's price change since opening is almost -5%). Local lows from May are currently being tested. If support at $3 were to be broken, then the path to $2.25-$2.50 would be open. It's worth noting that last year's summer period saw significantly lower levels than June, meaning that seasonal increases during the summer may not always occur. However, seasonality still points to potential upside. Source: xStation5