Natural gas drops 7%, sharpest decline since January following big run-up on supply concerns
Natural gas futures dipped as much as 8% on Wednesday, pulling back from a more than seven-year high above $6 per million British thermal units hit during the prior session.
After falling to $5.42 for the November delivery contract, some losses were recovered to make it 6.85% less at $5.47. This is the worst performance in a daily since January.
This month has seen natural gas prices rise amid a European energy shortage that has pushed power prices up to new all-time highs.
The September natural gas futures have risen 26%, with prices more than doubling since the start of the year.
Although Wednesday’s drop in prices was unexpected, many believe that this is a temporary setback to an otherwise positive trend.
Oanada’s strategists said that all the natural gas fundamentals point to higher prices, including strong Chinese demand, US production shut down offshore, and low Russia supplies. There is a problem with the natural gas market and this will not change soon.
This is still a development story. Stay tuned for new updates.