With the natural gas futures market resembling a game of limbo over the past few sessions, some market watchers are now asking “How low can you go.” Continuing the sloping trend from last week, December natural gas futures shed another 35.4 cents to settle at $7.60.

For the session, the prompt month traded within a range of $7.55 to $7.935. On Friday, the December contract fell 24.5 cents to settle below the $8 mark at $7.954. Last week, the prompt month fell 77.1 cents in total.

“My limit of $7.68 to $7.70 was busted through in the afternoon, so I am now much more bearish on natural gas than I was at the beginning of Monday,” a Washington, DC-based broker said. “This sort of opens the door to further weakness. I think initially $7.50 is probably a decent level, maybe $7.51-7.52. Below that, we are down into the $7.00 to $6.90 range in terms of how low we might go.”

He said the market saw an acceleration in selling at the end of the session after it got through that $7.68-7.70 support level. “Monday’s action compared to Friday’s trading session is a big boost to the bearish side,” he said. “The Stochastics are very oversold. This does not mean that they can’t stay that way for a while as they stayed overbought for a good month and a half as we were making that run-up. I don’t think we are done going lower quite yet.”

The broker also focused on the fact that shut-ins from the Gulf of Mexico declined sizably last week. “If we did three times the five-year average in last week’s natural gas storage report with a significant chunk of Gulf production out, then we stand the chance of seeing another big injection this week, especially with the Gulf returning,” he said. “Perhaps, that is weighing in on this market as well.”

With federal and state offices closed on Thursday, Nov. 11 for the Veterans’ Day holiday, the Energy Information Administration reported that the natural gas stocks report for the week ended Nov. 5 will be released one day early at 10:30 a.m. (EST) on Wednesday, Nov. 10.

IFR Energy Services’ Tim Evans said that Wednesday’s report is seen padding inventories by another 20-30 Bcf. Citigroup’s Kyle Cooper is calling for an injection in the high teens or 20s. Whatever number the report ends up revealing, it will be compared against last year’s 32 Bcf injection and the five-year average build of 7 Bcf.

Weather forecasts are also believed to be playing a role in the markets direction, but the Washington, DC-based broker warned that interpreting the impact of weather forecasts on the natural gas futures market has been difficult. He noted that there have been a number of conflicting reports that make it difficult to form a consensus.

While parts of the country are beginning to feel the chill, any prolonged cold is not expected to stick around just yet, according to the National Weather Service, which said Sunday in its six to 10-day forecast that below-normal temperatures should hit the Western U.S. and Florida, while the Midwest is expected to experience normal temperatures. The remainder of the country is forecasted to see above-normal temperatures for the period.

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