Natural gas yesterday traded with the negative node and settled -2% down at 209.6 dropping to a two-day low after Goldman Sachs said the fuel’s recent rally was “unsustainable” and recommended investors sell their positions.
It earlier fell by as much as 2.5% to trade at $4.633 pmBtu, the lowest price since June 9. Earlier in the day, influential Wall Street bank Goldman Sachs advised investors to lock-in trading profits before the gas market reverses, saying that the recent rally in prices was “transient” due to strong cooling-related demand.
The report added that, “demand for natural gas will likely diminish in the coming weeks as the weather normalizes and nuclear power plants come out of maintenance.” Prices have rallied nearly 18% since hitting a low of $4.077/mbtu on May 20.
Prices traded at $4.964 on June 9, the highest price since Aug 2010. Meanwhile, forecasts showing mild weather in the US Northeast next week also weighed on prices.
For today's session market is looking to take support at 206.1, a break below could see a test of 202.7 and where as resistance is now likely to be seen at 214.6, a move above could see prices testing 219.7.
