Natural Gas Fundamental Analysis Jan. 17, 2012, Forecast
futures prices continued to drop finding a new 28 month lows as the weather service predicts continued warm weather reducing demand for the heating fuel.
Natural gas futures for February delivery closed at USD2.547 plunging another 0.10%
Future prices have been under the psychologically critical USD3.00 level for quite some time and has developed as bearish sentiment after the Commodity Weather Group stated earlier that temperatures on the U.S. East Coast will likely remain mild, earlier. With consumers being more caustious this year due to the economic situation and lower demand, Natural Gas prices have continued to plummet.
Front month future prices on the NYMEX have dropped in 15 of the last 18 trading sessions. Prices collapsed 12.8% last week alone, the largest drop in natural gas prices since August 2009.
Additional downward pressure on prices is expected after the U.S. Energy Information Administration stated it expects gas inventory to end October, 2012 at an all time record of 3.96 trillion cubic feet, while storage capacity is estimated to be just 4.4 trillion cubic feet.
Prices have cascaded almost 29% since December. Compared to this month last year prices are 42% lower. Although all technical signals show Natural Gas as a strong sell, with its price at a bottom and the dead of winter in front of us, one cold spell could push these prices upwards.
Analysis and Recommendations:
Support and Resistance levels for tomorrow S: 2.52 2.53 2.55
R: 2.57 2.59 2.6
Originally posted here
