FxWirePro: Natural gas likely to test $2.5 area again

After finding support around $2.5 per MMBtu area twice since February, the price of natural gas has been creeping higher and as expected, https://www.econotimes.com/FxWirePro-Upside-correction-in-Natural-gas-is-likely-to-continue-further-1318543 price reached around $3 area before sellers emerged again.

Since reaching $3.05 area per MMBtu, the price has been declining steadily over the past four weeks and currently trading at $2.79 per MMBtu. The current trade escalation between the United States and China means that the Chinese side will be less eager to take up natural gas supplies from the U.S., where the production has skyrocketed since 2006/07. Since then, the production has increased by 10 trillion cubic feet.

Based on our latest calculations, we expect the price to decline to $2.5 area to test the support again. However, the volatility is likely to increase from here and expect $2.6 per MMBtu area to act as a strong support.

Depending on the trade escalation, the price could dip even further. 

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