Natural gas (NATGAS) price dropped below $2.6/MMBtu, from recent high of $2.75/MMBtu, as generally comfortable weather conditions are expected this week across most of the US. Also oversupply concerns weighed on market sentiment. Data from China showed the natural gas production in the second largest economy reached a record high last year. On the other side, expectations of colder weather and therefore higher demand for the final week of January, as well as record demand for liquefied natural gas exports, may provide some support for bulls. Last week, the EIA inventory report showed a higher-than-expected decrease in natural gas supplies. The total inventory levels currently stand at 3.196 trillion cubic feet, up 126 billion cubic feet compared to last year, and 218 billion cubic feet above the five-year average, according to the government data.
Natural gas (NATGAS) launched today's session with a bearish price gap and is currently testing support at $2.60. If the current sentiment prevails then the downward move could be extended to the support at $2.46. On the other hand, breaking above the resistance at $2.70 will invalidate the bearish scenario and the market may launch another upward impulse with resistance at 43.00 being a potential target. Source: xStation5
