Natural gas prices have continued to climb, rising 5.1% for the week despite concerns about oversupply. The May gas contract on the New York Mercantile Exchange’s Henry Hub settled at $2.221 per mmBtu, up from its 2.5-year low of below $2 last year. While prices have hovered around the mid-$2 level for some time, there is optimism that they may break out in the near future.
Analysts suggest that the recent cold front that is expected to increase demand for indoor heating could contribute to this price breakout. However, there are concerns that the supply of natural gas may outstrip demand, leading to an oversupply that could push prices back down.
Despite these concerns, energy markets advisory Gelber & Associates suggests that natural gas prices may continue to recover in the higher $2 range in the short-term. While the longer-term outlook remains uncertain, traders and analysts are optimistic that natural gas prices could continue to rise in the coming weeks.
As the debate over the future of natural gas prices continues, investors will be keeping a close eye on both supply and demand trends to determine the direction of this key energy market.
