Natural gas prices closed sharply lower for a third consecutive day on Monday as above-normal weather forecasts continue to pressure prices.
The spot January 15 contract has fallen nearly .600 from the highs set just last Wednesday trading under the 4.000 level this morning for the first time since late-October.
Late day buying rallied the January contract back above 4.000 as the latest weather forecasts are not quite as bearish as last weeks'. But the forecasts remain bearish on both the 6-10 and 8-14 day outlooks as well as in the near term forecasts into this weekend.
The market has fallen back toward the lower end of the past 1 month range but is not expected to fall to new price lows ahead of winter. With current storage levels 10% below the 5-year average for a similar time frame, any subsequent changes in the bearish weather forecasts should quickly reverse the fall.
There is still much winter heating demand potential for natural gas over the next 2-4 months. Current weakness in the market is an excellent opportunity to buy the winter 15 contracts ahead of the expected winter rally.
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