The natural gas prices rallied after the weekend amid expectations that Hurricane Agatha's remnants could wreak further havoc. A bullish weather pattern for the 8-15-day period caused a massive spike, aided by US production holding near 95 Bcf/day.
The US gas production could increase to 97 Bcf/day, and a prolonged period of bearish weather patterns could encourage the bears. The bulls look exhausted after a fast run-up since the first trading session of this week.
The bulls have witnessed some bouts of profit booking above $9.4 that may encourage the bears to command the scenario. Prevailing uncertainty could tilt the trend in either direction as the hurricane mania seems to be fading now.
Natural gas futures showed signs of exhaustion in the hourly chart after they could not find a breakout above the ‘Stop Loss’ level at $9.552 and returned after testing the day’s high at $9.540. The natural gas bulls are struggling to hold above $9.3 due to the presence of bears above this level.
I find that the recent bullish trend, resultant of the formation of a ‘Bullish Crossover’ on the first trading session of this week but shortly this Crossover could reverse into a ‘Bearish Crossover’ in today’s trading session that could push the prices below $8.5 soon.
The momentum could turn bearish from bullish amid fading probabilities of the redevelopment of the remnants of the tropical storm Agatha into the first-named Hurricane of 2022.
Disclaimer: The author of this analysis does not have any position in natural gas futures. Readers are advised to take any position at their own risk, as natural gas is one of the most liquid commodities in the world.