The natural gas market gained just over 2.5% in today's session as a post-EIA report short covering rally lifted prices from a new 3-month low.
This new 3-month low set early today at 2.633 by the October 15 contract set was a new low by 1/2 cent but failed to initiate follow through selling.
The market tread water ahead of the morning EIA storage report which came in at a larger than expected 94 Bcf. However, 8 Bcf of this injection was reclassified gas from base to storage which made the injection appear artificially high.
With no reaction following the report, there was a steady follow of buying into the close. Many traders are already out for the Labor Day Holiday weekend as liquidity was fairly low.
Current gas in storage of 3,193 Bcf with 9 weeks to go in the injection season has the market on course to test the all-time storage high of 3,929 set in 2012.
The latest 6-10 and 8-14 day NWS forecasts are bearish as a smaller area is now above-normal with a larger area of the U.S. forecasted to be below-normal.
If summer cooling demand ends before winter heating demand arrives, natural gas prices could come under heavy selling pressure possibly as early as next week.
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