The natural gas market had several sell off attempts during today's session but finished the day well bid as prices closed higher for a 5th consecutive day.
Many questions remain regarding last week's rally and whether a post-winter seasonal low has been set in the market.
Fundamental factors remain tilted toward the bearish side including weather forecasts - both short and longer term, storage injections the past 4 weeks, and a new record high in U.S. production reached last Monday.
The primary bullish feature during the first four months of 2015 has been power generator demand of natural gas which was running 18.5% above last year's level during January and February. This increase in demand could be the factor in helping to turn the market around possibly sooner rather than later.
The natural gas rig count has also been falling to new all-time lows in April which at some point will affect production. The rig count drop in the crude oil market has already lowered production in that market for the first time in 4 years. It is only a matter of time before it reaches natural gas.
If last week's rally was a short-covering squeeze, the market should sell back lower this week. Today's rally higher ran counter to this assumption. If natural gas prices instead hold firm this week and continue to move higher, it would be a further indication that a post-winter and possibly long term low has been set.
The natural gas market is notorious for putting in false market lows enticing new buyers only to quickly force them back out on ensuing weakness. The next few days of trade with overall bearish fundamentals should be interesting to watch.
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