A Self-Defeating Natural Gas Rally In The Making

Natural gas is living up to its nickname, the widowmaker. All natural gas has ever been good at is breaking hearts and breaking the hearts of bulls and bears alike. With the latest surge in natural gas prices (please excuse the sell-off today), the entire curve is firmly above $2.50/MMBtu.

Source: CME

While I hate to be the one to spoil the bad news, the reality is that this rally is self-defeating in nature. The only reason the natural gas market flipped back into a deficit was because of very low natural gas prices in the prompt months that forced producers to shut-in production.