Natural gas (NG) is now trading at $2.70. Even an extreme heat wave in some parts of the US could not help prices climb higher in line with expectations. Strong renewable energy generation is currently limiting gas-fired power plant output, while milder temperatures in northeastern states are partially offsetting increased demand for air conditioning in Texas and other southern regions of the country. Elevated production and full storage facilities do not make the situation better. In July, output approached record highs of around 110.3 billion cubic feet per day. As for inventories, they stand at over 3 trillion cubic feet, which is above the five-year average.
Liquefied natural gas exports are currently not a challenge for the domestic market. Deliveries to US LNG terminals have remained at approximately 17.4 billion cubic feet per day, staying below April’s peak. Therefore, this factor has yet to create a meaningful supply shortage.
The only significant driver can be found on the global stage. Asian and European gas prices have just risen to a four‑month top due to supply disruptions through the Strait of Hormuz and the Red Sea. Elevated external costs are likely to increase the appeal of US LNG globally and push domestic levels higher.
The ultimate recommendation is to sell natural gas at the current price of $2.70, targeting $2.50 within one month. To mitigate the risk of adverse market movements, place a Stop Loss order at $2.90.
This content is for informational purposes only and is not intended to be investing advice.
