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NATGASUSJUL20 - Natural Gas, front month
NGV0 - Natural Gas, October 2020
NGX0 - Natural Gas, November 2020
Global natural gas prices continue to struggle with an overhang of supply weighing on the market. Following a prolonged period of below normal demand, US and global inventories have built to a seasonal high level. The recent mild winter across the Northern Hemisphere was followed by the Covid-19 pandemic, both reducing demand from consumers during the winter and more recently from industrial users during the lockdown period.
While crude oil has been sent on the road to recovery on a combination of OPEC+ production cuts and a revival in global demand, natural gas prices in the U.S. and Europe may stay under pressure during the coming months as stock piles continue their seasonal build, potentially towards capacity.
U.S. natural gas futures for delivery in July trade just above support at $1.60/MMBtu ahead of the March low at $1.52/MMBtu. Without a strong pickup in demand due to warmer weather or increased industrial demand, the short-term risks point to lower prices still.