Natural gas traded to a low of $1.521 per MMBtu on the nearby May futures contract on April 1. The low in the continuous contract was two ticks lower at the $1.519 level during the week of March 23. Natural gas fell to its lowest price in a quarter of a century. In 1995, the price reached $1.335 and $1.25 per MMBtu.
The energy commodity’s path since November 2019 has been a series of lower highs and lower lows. Most of the selloffs throughout the winter months led to price recoveries that failed at a lower level than the previous peak price as selling emerged in a bearish environment.
The bearish price path of the natural gas market was firmly in place long before the spread of coronavirus caused a deflationary spiral in markets across all asset classes. In early January, the peak time of the year for natural gas demand, the price of crude oil rose to a high of $65.65 per barrel on the nearby NYMEX futures contract. At that time, natural gas only made it up to a high of $2.255 per MMBtu on the continuous futures contract.
This week, the 2019/2020 withdrawal season finally came to an end as inventories in storage rose for the first time since early November 2019. The United States Natural Gas Fund, LP (NYSE:UNG) tracks the price of the energy commodity higher and lower.
Market Expected First Injection Of The Season Of 26 bcf
According to Estimize, the consensus data website, the market had expected the Energy Information Administration to report an injection of 26 billion cubic feet of natural gas into storage for the week ending on April 3. The rise in stocks the EIA said on April 9 was slightly higher than the consensus estimate.