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Natural gas prices fail to remain at $7 following a turbulent week.

After a wild and tumultuous week, the price of natural gas failed to hold when it reached $7.

On Friday December 9th, the NYMEX natural gas futures for January delivery closed at $6.60/MMBtu after dropping 5.3%. This was still a 5.7% increase from the low of $6.25 set earlier in the week.

Analysts suggest that large hedge funds are responsible for pushing down prices around the $7 mark in order to defend their positions. In order to move upward, the price of natural gas needs to break into the $7.20-range.

The volatility in gas prices accelerated on Thursday after the U.S. Energy Information Administration reported that utilities took out 50 billion cubic feet from storage for the week to December 1. This was more than double the previous week's draw and occurred despite heating demand being lower than normal for this time of year.

The weather over the last few days has been exceptionally cold due to a polar vortex and a near-record freeze expected to last until late 2022, though weather forecasters say this December could be the coldest since 2010. Storage gas could be down by as much as 500 Bcf by early January as a result of the cold blast.

It appears that the fundamentals of natural gas will ultimately win out, but until prices can reach and sustain the $7.20s/MMBtu area, erratic fluctuations in price can be expected.