Natural gas prices moved back higher in today's session after trading down to the lower end of the past month's range in last week's trade.
The market was supported by changing weather forecasts putting pockets of cold into regions of the U.S. surrounded by large areas of above-normal temperatures. The uncertainty regarding upcoming summer cooling demand which is expected to be record high in comparison to upcoming storage injections has been the primary factor keeping the market in a sideways range.
Once these uncertainties are calmed and the market realizes that storage will again at or near an all-time high later this year, a final price low in the market is expected. This upcoming low, wherever it may form, should be a multi-year low for natural gas prices.
One other factor which will be highlighted tomorrow has been the small drop in U.S. production. U.S. production has declined by 3.5% according to a recent report since topping at an all-time high in February and could be a bullish factor along with increased power generator demand later this year.
The market should remain largely range bound in upcoming trade chopping in a .200-.300 price range. An aggressive trade would be to short the spot contract on a rally into the 2.100-2.200 area or remain patient for a better buying opportunity at a later date.
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