Natural gas futures witnessed a sharp reversal after a pre-inventory move up to $5.594 and tested a low at $5.256. Undoubtedly, this could be the impact of profit-taking after the announcement of higher weekly injections. But, the volatility could continue since the threat from Hurricane Nicholas is over, and the US Gulf energy companies have increased the pace of restoration of production.
The pace of supply restoration has started to increase bearish pressure. Undoubtedly, production and supply disruption was the reason behind this steep rally over the last four consecutive weeks, and now the reversal could be equally sharp.
I mentioned the possibility of repetition of 2018's moves in my previous analysis when natural gas started its first breakout in June 2021. Once again, I would like to mention that similar volatile moves to the ones which took place after testing the peak in 2018 could continue now.
Natural gas futures witnessed a steep reversal of approx $0.658 after testing a peak at $5.934 during the second week of November 2018. They could follow this move before today's weekly closing and could test a low of $4.986 after testing the seven-year-peak of $5.644 during this week.
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 of the world.