FxNews—U.S. natural gas prices dropped to $2.53 per million British thermal units (MMBtu). This decline continued from a high of $3 seen over three months ago. The drop is due to high supply and reduced demand caused by hurricanes in the Southeastern United States.
Natural Gas Storage Surges in Early October
Recent statistics from the Energy Information Administration (EIA) indicate a significant increase in natural gas storage. In the week ending October 4th, storage levels in the lower 48 states rose by 82 billion cubic feet—the largest increase since March. This was also much higher than experts had predicted, a 71 billion cubic feet increase.
Impact of Hurricane Milton
The effects of Hurricane Milton in Florida’s Gulf Coast contributed to the falling prices. The hurricane caused many homes to disconnect their electricity, decreasing the demand for power from gas generators. This situation is similar to what happened previously with Hurricane Helene.
NATGAS Analysis – 14-October-2024
Our previous NATGAS analysis (U.S. Natural Gas Hits New Low) forecasted that the price would likely rise from the 38.2% Fibonacci retracement level ($2.46) to test the 100-period simple moving average. The forecast came into play, and consequently, the downtrend resumed from the 38.2% Fibonacci retracement level of the B.C. wave ($2.64).
Today, natural gas prices fell below the $2.46 resistance, trading at approximately $2.40 as of this writing.
Interestingly, the Awesome Oscillator signals divergence, meaning the trend can potentially reverse or consolidate near the upper resistance levels.
NATGAS Price Forecast – 14-October-2024
The primary trend is bearish, and the immediate resistance is at AB’s 38.2% Fibonacci retracement, the $2.46 mark. From a technical perspective, the current downtrend will likely resume with the next target at the 50% Fibonacci retracement, the $2.34 mark.
Please note that the bearish outlook should be invalidated if the price exceeds the 100-period simple moving average.