Natural Gas: Extremely Large Drawdown From Storage Pops Futures Through Resistance

It wasn't very strong resistance at $4.049 so I wouldn't count on technicals to support should the weather forecast change but for right now, baby it's cold outside, from Denver to Chicago and down to Texas and looks to remain that way, 10 to 20 degrees below average in some locales.
And in my favorite dreamtime scenario all the cold air heads to 10282. (NYMEX zip code)
We'd be up another 10% on the day.
$4.11 last, up 15 cents.

First up, the CME:
Nat Gas inventories bullish 

Nat Gas prices are surging higher on a very bullish weekly inventory report just released. The net withdrawal of 162 BCF was well above the market consensus as well as most all of the individual projections. The spot Jan contract is now trading above the psychological $4/mmbtu level as well as the range resistance area of $4.049/mmbtu. The next stopping point is likely to be a test of the $4.10/mmbtu level an area reached for a few sessions in the middle of October. This was exactly what the bulls were hoping for as much colder than normal temperatures can still result in a very strong draw in inventories in spite of the robust US production levels.

With another round of cold temps on the way starting next week across most of the US prices should remain relatively supported for the foreseeable future. I am not sure the price surge will hold today without some of the weak longs taking some profit off of the table but overall the fundamentals are starting to line up with what the technicals have been saying for the last several weeks… a modest uptrend is in play.

Today's EIA report was bullish versus the market consensus and compared to the so called normal five year average and last year. The report showed a net withdrawal that was above the market consensus (162 versus 138), and greater than last year and the five year average net withdrawal for the same period. The 162 BCF withdrawal (about normal for this time of the year) was about 24 BCF above the market consensus calling for a withdrawal of around 138 BCF. The draw of 162 BCF was above my model forecast (115 BCF withdrawal) this week. The year over year inventory situation remains in a deficit position versus last year and has now moved back into a deficit position versus the so called normal five year average. The current inventory deficit came in at 104 BCF versus the normal five year average or about a negative 2.8 percent.

 This week's 162 BCF withdrawal compares to a 62 BCF withdrawal from inventory last year and a withdrawal for the five year average of 41 BCF for the same week....MUCH MORE

See also yesterday's "Natural Gas: Polar Air Sweeps Into U.S. Bringing Snow and Ice".

And here's the daily chart showing the line just above $4.00 where things got a bit congested recently, back in June and through May:

FinViz