Friday, May 18, 2012

"US natural gas futures rise early, front hits 3-month high"

The futures have recovered and more their losses from yesterday.
From Reuters
U.S. natural gas futures headed higher early Friday, with a tighter supply and demand balance
and extended forecasts for warm weather again driving thefront-month contract to a three-month 
high despite overbought technicals and comfortable supplies.
 Gas prices have gained about 17 percent so far this month, backed by signs that record production 
was finally slowing while demand was picking up as more electric utilities switch from coal to cheaper
 gas to generate power. 
Chart traders said technicals turned bullish over the last month as futures rallied 40 percent from the 
10-year low of $1.90 per million British thermal units, breaking through some stiff resistance along the way. 
At 8:35 a.m. EDT (1235 GMT), front-month gas futures  on the New York Mercantile Exchange were
up 7.6 cents, or 3 percent, at $2.67 per mmBtu after climbing earlier to $2.685 which marked their 
highest since Feb. 23. 
While some said the market was due for a pullback, noting the relative strength index had climbed 
into overbought territory well above 70 percent, they did not rule out further gains once higher 
temperatures boost air-conditioning demand.
But many remained skeptical of recent gains with storage and production still at or near all-time highs
 and prices reaching levels that could slow or even reverse utility fuel switching, a big factor in boosting
 gas demand this year. 
"This (11-15 day) period begins where the prior (6-10 day) period left off, with some additional warm
 changes to the Midwest and Northeast. The result will be a continuation of an abnormal amount of  
cooling demand for late May across key regions," private forecaster MDA EarthSat said in a report.