Those with a Panglossian outlook for natural gas have been expecting a bull market in this commodity for quite some time now, but the asset itself stubbornly refuses to cooperate.
 
Thus, we are rather left like the proverbial passenger at the bus stop, waiting for something that may never arrive. Natural gas futures slumped almost 10% this week, to an eight-month low of $2.774 per British Thermal Unit (BTU) as production by energy companies continues to soar. Reports of additional output thanks to so-called ‘super fracking’ in the US sent prices into retreat, while Bank of America Merrill Lynch, known for the quality of its analysis, cut its forecast price from $4.30 per BTU to just $3.30 per BTU.
 
The broker added that prices were likely to continue their merry descent, with a price target of below $2 per BTU by October of this year. There will be the usual siren calls about cold weather in January boosting the price, but it is hard to argue with the downtrend that started back in mid-2008.