Commodities▼ Bearish
Natural Gas Holds Near $2.50 Support as Supply Surges, Fed Looms
Natural gas hovers near $2.50 support as supply stays abundant and no heatwave emerges. The Fed decision may cause a tremor, but seasonal weakness persists, FXEmpire's Chris says.
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Natural gas futures stalled near the $2.50 support level Wednesday. Abundant supply and the absence of a heatwave are weighing on prices, said Chris, a senior analyst at FXEmpire.
The front-month contract is rolling over into September, a period that typically sees weak demand before winter, Chris noted. The market is in the softest part of the year for natural gas consumption, and no heatwave is forecast to draw down inventories.
Supply remains extraordinarily high, he said. That abundance makes any sustained rally unlikely unless a demand shock appears. Short-term bounces could come from a heatwave, Chris added, but even those would likely be capped by the seasonal oversupply.