From the CME:
Nat Gas futures breached the $3.50/mmbtu technical resistance level in overnight trading and has held above this level throughout today's session… although prices are well off of the intraday highs hit pre-release of today's inventory report. The market is now back in the $3.50/mmbtu to $3.64/mmbtu trading range. The market has been in a short covering rally for the last three sessions since the spot contract hit a short term bottom of $3.379/mmbtu on Tuesday.
Nat Gas prices held above this key technical level as the NOAA six to ten day forecasts has turned decidedly more bullish as the area of below normal temperatures expands along the eastern third of the US. The longer term eight to fourteen day forecasts is also less bearish as the area of above normal temperatures is shrinking with the east coast now expecting normal temperatures during this timeframe. Simply put the call on Nat Gas for heating related demand is growing which will have a negative impact on the upcoming injection reports over the next several weeks.
Thursday's EIA report was neutral versus the market consensus and compared to both last year and the so called normal five year average. The report showed a net injection that was around the market consensus (35 versus 36), but greater than last year and the five year average net injection for the same period. The 35 BCF injection (around normal for this time of the year) was about 1 BCF below the market consensus calling for an injection of around 36 BCF. The build of 35 BCF was below my model forecast (40 BCF injection) this week. The year over year inventory situation remains in a deficit position versus last year and is still in a modest surplus position versus the so called normal five year average. The current inventory surplus came in at 57 BCF versus the normal five year average or about a positive 1.5 percent....MUCH MORE
Today's 5-minute chart:
