Natural Gas Looks Forward To The Winter Season And Drops

November 27, 2017

Summary

Natural gas is typically a highly volatile market when it comes to the futures contract for the energy commodity that trades on the New York Mercantile Exchange. Since the inception of trading in natural gas futures back in 1990, the contract has traded from lows of $1.02 in 1992 to highs of $15.65 per MMBtu in 2005.

The most recent significant high occurred during the winter of 2014 when the price rose to $6.4930. However, huge discoveries of the energy commodity in the Marcellus and Utica shale regions of the United States and warm temperatures during the winter of 2015/2016 caused the price to fall to the lowest level since 1998 at $1.6110 per MMBtu. The price of natural gas was trading at around the $2.934 level on the January NYMEX futures contract on November 24. Now that we are at the very start of the winter season, it will be Mother Nature and temperatures across the United States that determines the path of least resistance for prices over the coming months.

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