An early bounce in the natural gas market this morning again stalled under key resistance basis the March 15 contract at the lower-2.900 level. As resistance held, the market moved back toward unchanged ahead of the weekly EIA storage report.
Today’s 111 Bcf storage withdrawal came in 3 Bcf above the average pre-report estimate briefly spiking the market in minutes following the report. But by day’s end, the market traded back toward unchanged.
The inability for natural gas prices to extend recent gains with some of the coldest temperatures in decades reaching the U.S. is not a particularly bullish signal. It makes one wonder what prices might do once the forecasts do moderate and the market enters into the post-winter shoulder season?
With production now running 13.5% above the 2014 level, the market is looking at the possibility for a record amount of gas to be put in storage by the end of the year.
Key technical support held today and the market fell lower in the face of bullish news. If the March contract falls below 2.567-2.575 weekly low support, the next longer term support doesn’t come into play until the 2.170-2.230 level.
The next few sessions should be quite interesting to watch in the natural gas market.
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