US natural gas (NG) has dropped to the $2.50–$2.70 range, hitting 18-month lows against a backdrop of fundamental calm and the end of the heating season.
Indeed, the underlying data tell a story of resilience and stability. The latest Energy Information Administration (EIA) report spells it out clearly: storage was replenished by an impressive 103 billion cubic feet last week, easily beating expectations and leaving the five-year average somewhere in the dust. In fact, the domestic market is awash in supply, while seasonal consumption is slowly winding down. So, what's keeping prices from falling off a cliff? Record-breaking LNG export capacity. Deliveries to liquefaction terminals consistently top 18–19 billion cubic feet per day, approaching historic highs.
From a technical perspective, natural gas is scraping the bottom near $2.53, a low not seen in a year and a half. A support floor has likely formed here, and it could set the stage for a short-lived move higher. The Relative Strength Index (RSI) is dropping as well, inching toward oversold territory. If history is any guide, similar setups have featured local lows followed by a springboard rebound up to the $2.77 resistance.
The final recommendation:
— Buy NG at the current price, targeting $2.77 within one to two months.
— To mitigate downside risk in the event that the market moves against us, place a Stop Loss order at around $2.53.
This content is for informational purposes only and is not intended to be investing advice.
