After holding above key technical support on weakness in today’s early trade, the April 15 natural gas contract reversed back higher today on likely short-covering ahead of tomorrow’s EIA weekly storage report.
Tomorrow’s storage number is for a third week in a row expected to be near the 200 Bcf level. A Dow Jones analyst survey for tomorrow’s report is averaging 191 Bcf. How the actual number comes out in comparison to pre-report guesses could add to price volatility in tomorrow’s session. A 219 Bcf draw two weeks ago, while large, came in below expectations resulting in a strong sell off following release of the number.
Tomorrow’s report could actually come in above estimates which could drive the market even higher near term possibly toward the $2.950-3.000/MMBtu basis the April 15 contract.
However, once weather-related demand for natural gas eases over upcoming weeks, a seasonal low ahead of the summer cooling season is expected. Whether or not this drops the market to new lows ahead of summer remains to be seen.
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