Spot natural gas prices (CFDS On Natural Gas) continued to decline during the recent trading at the intraday levels, to record daily losses until the moment of writing this report, by -1.02%. It settled at the price of $4.362 per million British thermal units, after declining during trading yesterday and for the third day, by -6.43%.

Natural gas prices fell as traders assessed the outlook for warmer weather patterns and the potential for weaker demand over the coming weeks. Nymex gas futures for March settled at $4,232/MMBtu, down 34.0 cents. The April contract fell by 29.4 cents to settle at $4.198.

Speculators said the heavy selling in futures was in part due to relief that last week's Arctic cold snap was short-lived compared to the winter storm a year ago. The recent cold snap appears to have only a temporary effect on production, despite temperatures dropping to Texas.

Production held below 91 billion cubic feet on Monday, more than 5 billion cubic feet from recent highs after the freeze last week. However, with warmer weather already settling in this week, according to NatGasWeather, production is expected to recover steadily.

Technically, the price continues to search for a bullish bottom to take a base that may help it recover and rise again, amid the influx of negative signals on the relative strength indicators. This is in light of the dominance of the main bullish trend in the medium term along a slope line, as shown in the attached chart for a period of time (daily), supported by its continuous trading above its simple moving average for the previous 50 days.

Therefore, our expectations still suggest a return to the rise of natural gas during its upcoming trading, if the support level of 4.200 remains, to target the first resistance levels at the price of 4.954.

(Click on image to enlarge)