Recent forecasts indicate that US natural gas futures will decline beneath key levels due to a bearish market amid weather curbs. In general, the price will likely hit $2.676 as Permian basin data indicates a possible rising output through October. This rise will intensify natural gas price supply pressure due to adverse weather predictions.
US natural gas futures declined below key levels after trading low Tuesday. In any case, the bearish market amid weather curb hit below the $2.970 200-day moving average, the $2,948 minor top, and the $2,937 long-term pivot. Analysts predicted a $2,676 short-term pivot test in the near term. The decline comes amid Permian data growth.
Natural gas futures fell due to Permian Basin data showing potential output growth. Overall, the increased supply pressures impacted the market, resulting in a brief rally on Monday. Natural gas intelligence shows that the gain resulted from a temporary pipeline outage in Canada. Canada’s bearish market amid weather curb is now resolved.
Analysts noted normality in key regions’ output flows, boosting support in the short term. Meanwhile, demand remained subdued in the US as forecasters predicted mild weather. Experts noted that a larger part of the country experienced 60 to 80 comfortable temperatures. Yet, California and the southern US recorded localized heat.
The bearish market amid weather curb forecasts resulted in low demand in October’s first week due to cooling needs, lower heating, and cooler temperatures. Yet, Hurricane Helene disrupted the Gulf of Mexico’s energy production. It caused significant flooding and widespread outages in the Southeast, leaving over 2 million people in darkness.
Further reports indicate that the Gulf of Mexico could face another tropical system that would cause more disruption. In the meantime, officials commented that the price gain appeared overdone, but the supply-demand balance was unchanged after the storm. Appalachia maintenance and stagnant Permian output tightened the market volatility.
Experts clarified that the new pipelines will increase Permian output while Gulf production will recover gradually. Thus, they say the driving factors remain short-lived but are slowing storage builds and limiting daily injections. Natural gas prices' near-term outlook remains bearish, with demand remaining low and supply growing.
Market production is normalizing, and the market appears well-supplied. Hurricane Helene provided price support, but the market faces supply disruption. Analysts concluded that production would increase, and weather forecasts might result in low demand throughout the week. Thus, traders must monitor market changes.
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