Blame it on Global warming or simple Supply Demand problem.
Here's the Natural Gas weekly Chart
It's very close to the lows it made in 2012. On daily chart - it looks like a free fall
Mild Winter = Lower Demand
The latest meteorological estimates suggest that winter in the United States could be warmer than normal. US households use natural gas for heating and there is fear that lower demand for natural gas this winter can put enormous pressure on prices.
Inventory Buildup = Excess Supply
Natural Gas has been suffering from excess supply problem because of shale revolution for some time now and with demand also expected to drop, Natural Gas prices are in free fall. Only last week, the EIA (U.S. Energy Information Administration) reported that the natural gas inventory rose for the 29th straight week. Rising inventories means supply glut
More Bad News for Coal prices
Natural Gas is relatively clean energy. Just this year, natural gas has overtaken coal as the primary source of U.S. electric power generation with 31% power generation from this source. Now with Gas prices this low, more and more power utility companies expected to make switch from coal to Gas sooner than later
With lots of volatility and selling around Natural Gas, it's a space to watch out for.
1. Arun Shourie’s views now count for nothing
2. Why Lloyd Electric now has very impressive Chart?
3. Why INR can depreciate in coming weeks?
4. What has L&T stock done in 2015?
5. How to deal with Momentum plays? – HCL Infosystems
Do you like reading Stock Observations and don't want to miss it - then Like our Facebook Page. Market Observations will show up on your facebook timeline.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers