Natural gas prices seem to be following the pattern set by the oil prices over the last few days as they fell towards the end of last week with Hurricane Irma looming and it was expected to cause a lot of destruction in the state of Florida and other neighbouring areas. If that happened, it would mean that large areas would go out of power and hence the demand for gas would decline due to this factor.
This would in turn mean that the gas prices would drop and in anticipation of that, the gas prices fell below $3.0 towards the end of last week. But there was some good news as Hurricane Irma weakened as it made the landfall in Florida and it has now become classified as a storm and the destruction caused by it is likely to be much less than what was originally expected. This would in turn mean that the power shutdown would be much lesser and hence the demand is likely to be back to almost normal levels pretty soon.
This is the expectation of the market as it gapped higher at the open yesterday and has since continued to move higher yesterday and as of today morning as well. It trades just short of $3.0 as of this writing and is likely to continue to trade in a strong manner in the short term as the full scale of destruction is known in a slow manner.
Looking ahead to the rest of the day, we will know the actual demand and supply details only when the report comes out on Sep 21 but based on the weather forecasts and what the authorities have been saying, it can be reasonably judged that the demand is likely to switch back to higher levels in a few days time and so we should see the gas prices continue higher for today and in the short term as well.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Reverse H&S Pattern in Gold
- ,
- Commodities Daily Forecast - September 12, 2017
- ,
- Gold Daily Analysis - September 12, 2017
- ,
- Bullish Sentiment Sparks Risk Appetite, Gold Edges Lower
- ,
- Daily Market Forecast, September 12, 2017 - EUR/USD, Gold, Crude Oil, USD/JPY, GBP/USD
- ,
- Price of Gold Fundamental Daily Forecast - Gold Corrects Lower
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
