Natural Gas Analysis Report 11/30/19 – Are Prices About To Reverse

Natural gas prices declined almost 8% on Friday, the worst single day decline in almost a year. For the week, prices declined 13% for the week. To add insult to injury, natural gas prices had their worst November since 2001.

There are typically two seasons for the U.S. gas market: Summer (April-Oct) and Winter (November-March). Gas is injected into the ground in Summer and gas is withdrawn in Winter to meet demand that rises well above production.

The forecast this war was for above-normal snowfall for areas from the Big Apple to Boston, while cities including Washington, D.C., and Baltimore, will be more likely to get a mix of rain and snow.

Farmers' Almanac is an annual North American periodical that has been in continuous publication since 1818. Published by Geiger of Lewiston, Maine, the Farmers' Almanac provides long-range weather predictions for both the U.S. and Canada.

NOTE: the Farmer's Almanac claims its secret formula has yielded 80% historical accuracy.

The Farmers’ Almanac, which released its prediction in August, also expects colder-than-normal temperatures and plenty of snow, with the biggest chill coming at the end of January.

But that hasn’t been the case yet. Natural gas prices have declined so much because of warmer than expected weather is forecast over the next 8-14 days. What also hasn’t helped is consumption of natural gas for power generation fell by 5% compared with the previous report week, according to the EIA. And as a result, the Smart Money has been adding to short positions.

So where are natural gas prices headed, well if the level on level demand zone doesn't hold and reverse, the chart suggests price will test the August low at near $2.0000.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.