Another volatile trading session in the natural gas market which swung in a fairly wide daily trading range following release of the weekly storage report.
The storage report which showed the first withdrawal of winter 14-15 came in at 17 Bcf according to the EIA, near the upper end of pre-report estimates.
The December contract spiked up to a 4.502 high immediately following release of the report at 9:30 am central holding below yesterday's 4.508 weekly high was resistance.
By noon day trade, the contract had fallen to a 4.250 low. Buyers came back in during the last hour of trade rallying the contract to a 4.503 high by the session's close settling at 4.489. Another successful day for the natural gas bulls.
Today's 6-10 and 8-14 day NWS forecasts show continued below-normal temperatures across much of the upper-U.S. As long as forecasts remain cold, it is going to be difficult to push prices too far below the 4.000 level.
On the bearish side, 4.450-4.500 resistance needs to be broken soon to keep the near term trend up. With the market heading into a Thanksgiving holiday week, buyers might be more tempted to sit on the sidelines rather than adding to new positions near a 4-month high.
Any subsequent warm up in the forecasts could crater the market lower. Longer term, 4.985-5.000 remains the initial upside objective for this current rally with the possibility for price spikes into the 6.000-8.000 level in upcoming months if winter heating demand for natural gas is higher than expected.
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