Today's EIA storage injection of 63 Bcf (billion cubic feet) came below last year's 88 Bcf injection and the 5-year average injection of 73 Bcf but was not enough to stem the tide of recent selling.
Late day weakness dropped the new front month December 15 contract to a new contract low at 2.235 losing 1.8% on the session.
Current U.S. storage of 3,877 is 52 Bcf below the peak storage high of 3,929 Bcf reached in 2012. Upcoming weather forecasts remain bearish for natural gas demand with storage injections expected to continue well into the month of November.
The 1.948 low set by the now expired November 15 contract will likely be retested a support in upcoming trade by the December contract which is currently trading .308 above this low. If this support can hold in upcoming trade, there is good chance that low will be a long term bottom for natural gas similar to in April 2012 when the spot market last traded under the 2.000 level.
Nothing is bullish at the present time. That is why the market is so weak. However, one whiff of changing weather demand or a continued drop in U.S. production and the market reaction back higher will be quite volatile.
No comments:
Post a Comment