Today's Major Market Move: Natural Gas Futures Drop 10.3% in Tuesday's Session

We last talked about Natural Gas a little over a week ago when there was a 13% jump in one day. That move was precipitated by an announcement from Chesapeak (ticker: CHK) that they were cutting production in response to depressed prices. After dropping 5.7% yesterday and over 10% today, the price is getting very close to where it was at the time of the announcement.

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In that previous blog post we made the following comment:

The market surges 13% because CHK announces cuts and who benefits the most? CHK's competitors, that's who (e.g. EQT and RRC). Will EQT, RRC and the others follow suit? I think at the very least they will wait for if/when the current run fizzles out and the price starts tanking again.

The price has started tanking again so we're about to see if EQT, RRC and the other Natgas competitors are going to follow in CHK's path. The Wall Street Journal had an analyst quote regarding the issue of additional cuts:

"We did get a couple producer-shutdown announcements, but we haven't seen any further ones," said Gene McGillian, an analyst with Tradition Energy in Stamford, Conn. "We need to see additional producers shut [down], and signs that drilling activity's going to be cut back."

"Until we see either that or really cold weather," Mr. McGillian added, "the market's going to [be] mired in the low-price environment we're in."

With Chicago in the 50s yesterday, NYC hitting 59 less than a week ago and spring continuing to creep closer, the hope for colder weather to drive up prices must be fading fast.