The natural gas market started the new week of trade with another very large sell off as the front month April 16 contract was sold down to a new contract low losing 4.5% on the day.
The one positive note for the bulls was the inability for the April contract to push down to a new weekly low with 1.682-1.684 support holding. The April contract bottomed out at a 1.690 intraday low settling the session at 1.711.
The early-March weather forecasts turned much warmer over the weekend providing the initial spark for today's selloff. Production also continues to outperform expectations holding at 73.4 Bcf per day (dry-gas production) in February, a new monthly high.
With milder weather forecast predicting very little end of winter demand for natural gas, end of March storage could top the 2,250 Bcf level, the second highest on record for the month.
It will be interesting to see if the natural gas market can push down to new lows or if the trend may have exhausted itself for the near term.
Without a hot summer boosting demand of natural gas for cooling, the natural gas market should be looking at a second consecutive year of record high storage near the end of 2016.
Infosys sets a quicker pace than TCS, investors may find it attractive
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