U.S. natural gas futures plunged more than 11% at the lows Tuesday, reversing Monday's surge which saw the contract rally more than 10% at one point to break above $8 per million British thermal units and hit the highest level since September 2008.
Henry Hub prices declined 11.1% at the session low to trade at $6.95. However the contract made back some of those losses during afternoon trading, and ultimately settled 8.24% lower at $7.176.
From Monday's high to Tuesday's low the May contract shed 13.8%.
Natural gas prices have been on a tear since Russia's invasion of Ukraine in late February. The contract is coming off five straight weeks of gains and is up nearly 90% for the year.
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Matt Maley, chief market strategist at Miller Tabak, said Monday that natural gas looked ripe for a pullback from a technical perspective. Pointing to the relative strength index, a momentum indicator, Maley said the commodity was second-most overbought since 2003.
"Its RSI chart is now up to levels that have been followed by short-term pullbacks in the past," he noted Thursday. "We are still bullish on natural gas (and natural gas-related stocks), so we're not saying that investors should take profits right here. Instead, we [are] merely saying that investors should avoid chasing these assets over the near term."
Prices surged Monday on forecasts for colder spring temperatures, fuel switching from coal to natural gas, as well as the U.S. sending record amounts of LNG to Europe.