Uh yeah, there was some contango.
That action in the electronic session is tradable to the downside. $3.197, last.
Yesterday I had the sense to point out that something had changed:
Natural Gas Pops 3.6% Ahead of Tomorrow's October Expiry
The front futures are up 10.2 cents at $2.939.I did not have the sense to know what it meant.
This is a bit different. The last three expirations saw flat trading with a pop on the contango as the next month became the front month.
Not sure exactly what it means but any change in behavior is worth paying very close attention to....
I do however know that Whiskey, Tango, Foxtrot is the NATO alphabet for the letters WTF.
And I knowwhat that gap means.
Here's the Journal commentary:
--Market awaits Thursday inventory dataAnd Reuters:
--Record high inventory, but slimmer year-on-year surplus expected
--New buyers emerge as winter nears
By David BirdNEW YORK--Natural-gas futures settled at a two-week high Wednesday, as the October-delivery contract went off the board.
The gain in the incoming front-month November contact outpaced October's rise, as traders noted new buyers coming into the market as the winter heating season nears.
The price gains played out ahead of the scheduled Thursday release of U.S. weekly gas storage data. The figures, due at 10:30 a.m. from the Energy Information Administration, are expected to show an increase in storage that is smaller than a year ago, but in line with the five-year average. Stocks are expected to climb to another record high for this time of year, but the year-on-year supply surplus is expected to contract...MORE
* Short cover, cool outlook firm October futures at expiry * Nuclear plant outages also lend some price support * Mild near-term weather slows demand, limits upside * Coming up: EIA, Enerdata natgas storage reports Thursday (Recasts, adds trader quote, updates prices) By Joe Silha NEW YORK, Sept 26 (Reuters) - U.S. natural gas futures ended higher on Wednesday for a second straight day, with technical buying and forecasts for cooler weather next month lifting the expiring October contract more than 3 percent. Extended forecasts show cooler weather slipping into the Midwest and possibly the East in early or mid October. But with storage and production still running at or near record highs, many traders remained skeptical of the upside for prices despite some book squaring or technical buying before October went off the board. "I think the bottom is in for now. HDDs (heating degree days) look like they pick up (turn colder) in October, and traders are starting to focus ahead to (more demand in) winter," a New England-based trader said....
See also this morning's "Commodities: Focus on Rolls Not Spot".