Monday, September 23, 2013

Natural Gas Prices Head South

$3.64 down 4 cents. From Thursday's "Natural Gas Up 1% on EIA Storage Report":
$3.7500 up 1.03%. Watch that $3.74 line for a break, if it doesn't hold, $3.60 is the next line that bidders came in at, back on the 12th...
After the initial move up the futures went through that $3.74 on Thursday.
From the CME:
After what seemed to be a bullish inventory report last Thursday the Nat Gas market has been steadily drifting lower. The market is being impacted by what appears to be a moderating short term weather forecast that is likely to experience a lower requirement for weather related Nat Gas demand going forward. Most of the models based on the current weather pattern is now expecting the lowest level of Nat Gas demand by the end of this week as the shoulder season seems to be finally setting in.

The latest NOAA six to ten day and eight to fourteen day forecasts issued over the weekend are showing a changing weather pattern that is likely to result in a tempering of the temperature profile as the above normal temperature forecast will likely cover a smaller area of the US. Now that the first day of fall has arrived the weather is likely to continue on a path toward moderation as cooling related demand starts to dissipate but heating demand is still not likely to click in just yet.

From a technical perspective the spot Nat Gas contract has now been trading in the lower trading range after spending just three sessions in the trading range above the $3.72/mmbtu level. Except for the aforementioned three sessions above the $3.72/mmbtu level the spot contract has been in the $3.58/mmbtu to $3.72/mmbtu trading area since the end of August. As I have been suggesting for weeks unless there is a change in the fundamentals to a more bullish profile the futures market is going to have difficulty trading at a much higher level compared to current prices for a sustained period of time....MORE
Today's action via FinViz: