So far this week, natural gas prices have maintained some volatility, plunging to new multi-year lows early yesterday morning, but have bounced back since then to levels very close to where we ended the day back on Friday.
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Opposing forces have been at work this week leading to this choppy price action. On the bearish side, we have new all-time highs in production.
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We also have seen a drastic reduction in LNG intake over the last few days.
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These two factors initially were the focal points of the market, leading us to the fresh lows early yesterday morning. All the while, weekend gas burns were more impressive, and we continue to see a supportive hotter than normal weather pattern, with forecast GWDDs above normal for the next 15 days, with good model agreement on such a pattern.
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As a result, the market said, "not so fast" to the bear parade, rallying off those fresh lows rather quickly, leading us to where we are today as we wait to see which side is able to gain the upper hand. A lot of unknowns remain, such as the duration of the LNG decline, and if the upcoming demand regime is enough to negate or outweigh the bump up in supply.
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