Natural Gas prices have been on a nose dive since the start of the year. NGAS was trading at around $4.30 in January 2023 and in just couple of weeks it has now broken the $2 support almost 50% down since the beginning of this year. Gas prices has seen quite a lot of volatility in the recent times as it was only in August 2022 that the price made a 10 year high of $10, which was largely due to the supply disruption faced when Russia attacked Ukraine. An unusually warm start to the 2022/23 winter season has led to considerably less heating demand in the United States versus the norm, leaving more gas in storage than initially thought. At the close of last week, U.S. gas storage stood at 2.266 tcf, or trillion cubic feet, up almost 17% from the year-ago level of 1.938 tcf, data from the Energy Information Administration showed. Moreover, the European markets decided to cut down their demand for Natural gas in accordance to put pressure on Russia for its war on Ukraine. It was decided in August 2022 that the European countries will cut their reliance on Natural gas which was imported from Russia by 15%, as of now most of the major economies of Europe have reached the target, by using other alternative measure (coal) and rationing of natural gas.
On the supply front, the US is already the largest producer of Natural gas in the world, and with news coming in that their Freeport LNG plant in Texas which was closed down in June 2022 due to a fire is quickly beginning to resume its operations soon, thus adding to the global supply. This, along with lower demand of NGAS than expected, the natural gas prices has the tendency to go further down to its historic low levels of $1.500