Natural Gas Corner - Market Update - A Near Term Low May Be In Place

Natural gas prices rallied higher late in today's session trade led by strength on the back end of the price curve.

As pointed out in yesterday's market review, the back end of the natural gas price curve (i.e. the 2018 natural gas calendar strip) has been moving higher from last week's low even with recent selling on the front end of the curve.

The narrowing of the forward price curve can be an early indication that a market low may be near.  In today's session, the front end of the curve (i.e. the April 16 contract) rallied higher late in conjunction with previous strength in the back end  of the curve.

What this all may be telling us is that the market has digested much of the recent bearish news including storage, weather and production.  Additionally, there may have been technical buying related to the fact that weekly low support at the 1.682-1.684 level held for a second day today which could have brought in both short-covering and traders attempting to pick a market low.

There will need to be follow through buying into this week's end for today's strength to be nothing more than another bounce within a greater downtrend.  But today's late day buying is how rallies begin and a near term low may have been set this week in the natural gas market.