Natural gas prices have been on an upward tear over the past 3 days after bottoming for a 4th time above 3.740-3.760 weekly low support last week.
Worry about an early start to the heating season for natural gas has been the primary market driver as snow events last weekend in some parts of the upper U.S. and below-normal 6-10 and 8-14 day NWS forecasts kept a bid under the market.
However, the latest 8-14 day forecast released today is less extreme with more above-normal temperatures put onto the map.
Storage injections over the upcoming 8 weeks will be very important. Tomorrow's storage injection estimates have been very wide coming in between 80-103 Bcf with the average being a 92 Bcf injection.
A sub-80 injection could be a market mover higher but the likelihood is for a number near the top end of estimates which would be a bearish factor for the market.
As shown on previous posts, a breakout above former trend line support near the 4.100-4.150 level basis the spot contract would technically turn the market trend back higher.
But there is also a good chance for one more price drop lower taking out the November 2013 and July 2014 support level before a final seasonal low for 2014 is set.
Longer term weather forecasts are for the most part bearish for the upcoming winter 14-15. Forecasters last year were also bearish and they were dead wrong.
With lower storage this year and the potential for another cold winter, the greatest risk now is likely to the upside.
Carl Neill
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