After falling over 6% on Monday's open, today's expiring December 14 natural gas contract clawed slowly back higher. By today's close, all of Monday's losses plus some had been recouped as the December contract closed at a 4.282 expiration price.
Near term weather forecasts over the next 3-4 days have moderated for the southern part of the U.S. But the forecast in the northern part of the country particularly in the Northeast which experienced a sharp price run up last winter is expected to be cold with a heavy snow events.
This has helped temper the longer range forecasts which have turned markedly bearish during the week. Today's latest 6-10 and 8-14 day forecasts remains negative for natural gas prices if correct.
Tomorrow's weekly storage report which is being released a day early due to the Thanksgiving holiday could show a record high withdrawal for mid-November. A Bloomberg survey had a range of between 131-162 Bcf with an average withdrawal of 150 Bcf. The record high withdrawal for November was148 Bcf in 2000.
With the December contract expiration complete and many traders heading out for Thanksgiving, tomorrow should be quiet. The wildcard is the EIA report which could have a dramatic affect on prices if liquidity should fall.
In 2004, the expiring December 04 contract rallied from a 6.600 daily low to a 7.976 closing price over the last 30 minutes of trade, an increased of $13,760 per contract. This occurred on the day before Thanksgiving.
Price dips toward the 3.900-4.000 level should be bought with a breakout above 4.450-4.550 weekly chart highs needed to turn the longer term market trend back up.
Happy Thanksgiving.
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