Natural gas has been trading in a serious downtrend starting in November, but Monday’s upside action constituted a clear breakout from that trend.
So what’s behind the strength?
Well, the nat gas trade is all about the weather. After last year’s record-setting warmth, the market had hoped for a snap-back year and didn’t get it. This winter, although nowhere near records, has still been warmer than normal. However, with the second major storm moving across the country, the market has begun to remove the “global warming” price component.
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