What does historical analysis of noteworthy United States natural gas bear marketplace moves (NYMEX nearest futures continuation basis) reveal regarding the ending of the major bear trend that emerged in late February 2014? The mid-January 2015 low around 2.80 (NYMEX nearest futures continuation basis) could be, but probably is not, the final bottom. It is more likely that a final low will occur by end February 2015. The mid-January low probably will not be broken by much; in any event, substantial support lurks around 2.40.
Even if an observer focuses their attention on the natural gas price history variable alone, this is a very difficult marketplace call. In the current environment, much depends on weather, petroleum marketplace levels and trends (OPEC policy), whether (and how long) anticipated natural gas production jumps occur at current (or lower) gas prices, and the degree and duration of American economic strength. So the final bottom for natural gas may be postponed beyond February 2015.
Although history need not repeat itself, major natural gas lows (and highs) have not occurred in calendar March. April chronicles of course include the exceptional April 2012 major bottom; consequently, that calendar month represents a notable anniversary to watch, especially if weather for the balance of winter is warmer than normal. Gigantic inventories spurred the ferocious bear charge down to 1.90 in April 2012. However, assuming normal weather, and even allowing for increases in gas output, the current and probable US natural gas inventory situation looks relatively neutral, particularly in the context of NYMEX gas prices well under 4.00.
NYMEX natural gas reached many important troughs in late calendar August and September. However, a final low in late summer 2015 would stretch out the February 2014 bear marketplace longer than historical averages.
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Taking Shape- NYMEX Natural Gas Bear Trend History (1-19-15)