NYMEX NatGas Prices Kept Sinking Yesterday, Down 8.2 Cents to $2.806

Yesterday, the NYMEX "front month" futures contract for natural gas declined once again, marking four consecutive days of losses. The NYMEX price fell 8.20 cents per million British thermal units (MMBtus) to $2.806 per MMBtus. Why the slide? The best thinking we could find says (a) the weather isn't warm or cold enough to draw down stocks, and (b) we have more than enough extra gas sitting in inventory. Classic economics 101 states that a surplus of supply over demand results in falling prices. How much longer will the price continue to decline? Gas traders speculate that the short-term outlook is "bearish," meaning the price will continue to decline. However, in the not-too-distant future, they predict a turnaround and higher prices.

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