As experts emphasised the bearish technical momentum, natural gas futures continued to decline in early trade on Monday. The October Nymex contract, which had previously lost 56.0 cents to end last week's trading, was down 28.8 cents to $7.476/MMBtu as of roughly 8:55 a.m. ET.
Eli Rubin, senior analyst at EBW Analytics Group, claims that the front month's loss below critical technical support at $7.75–7.88 on Friday set the foundation for probable more declines in the near term.
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Bearish Technicals Seen Pressuring Natural Gas Futures as Sell-Off Continues| MRC News
According to Rubin, the price movement from last week creates a bearish technical environment for natural gas. "The slide into the weekend sets up further near-term selling pressure" after first bouncing off technical support between the 50-day and 100-day moving averages and surging above the 20-day moving average on Wednesday.
If the $7.50 level support fails, there might be "severe more falls," the expert continued. However, the volatility of the previous week shows that "natural gas is highly sensitive to any emerging bullish factors fueling a quick spike."
According to NatGasWeather, the major weather models only experienced minor adjustments when looking at weekend predicted patterns.
As exceptionally strong upper high pressure forms over the heart of the country this week, NatGasWeather reports that "the timing of swings in the national demand held, with quite significant demand this week." United States with highs of the upper 80s and 90s, hottest over Texas and the Plains." Mid-week highs will be in the upper 80s to close to 90 degrees throughout parts of the Midwest and up the Mid-Atlantic Coast.
According to the company, a system moving across the Northeast and Great Lakes late this week could bring some early fall heating degree days to sustain demand.
The Midwest and East are anticipated to experience "generally acceptable" weather during this time period, according to NatGasWeather, although the forecast remained gloomy for the period beginning this weekend and continuing through Oct. 4.
Trade this week will be closely watched to see if bears use recently discovered momentum to drive prices under $7.50 or if bulls come up with another another justification to purchase the drop, according to NatGasWeather.
Meanwhile, Hurricane Fiona pummelling Puerto Rico during the weekend, and the National Hurricane Center predicted that the storm's centre will continue over the eastern Dominican Republic on Monday.
As of early Monday, the storm's anticipated route revealed that the U.S. East Coast would avoid Fiona's path this week.
