After rallying back up to 3-week high resistance at the lower-2.700 level on Tuesday, the spot natural gas contract today reversed back lower in today's session erasing all of yesterday's gains.
The back end of natural gas price curve has traded down to new price lows but the front end led by the October 15 contract remains frustratingly range bound in boring sideways trade.
Weather forecasts have turned hotter but mean less as the month of September progresses. Above-normal temperatures will at some point turn into a negative for the market as winter begins. But at the present time, forecasts have been generally supportive.
Tomorrow's EIA storage injection is expected to average 75 Bcf with a range of estimates of between 69-81 Bcf.
Over the next 9 weeks, an average of 89.5 Bcf or 807 Bcf in total will need to be injected into storage for it to reach the 4,000 Bcf mark for the first time ever by the end of October. Over the past 5-years, an average of 79 Bcf or 711 Bcf of gas has been injected over the upcoming 9 weeks. The current record high for storage is 3,929 Bcf set in 2012. I still think a record high for storage could be set in 2015. The question is how it may affect the market price. Will it already be discounted? Time will tell.
Tomorrow's EIA report will hopefully break the market decisively out of the past 3-month trading range as current trade is about as painfully slow as it can get.
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