Normal Temps and a Draw in Storage for Natural Gas

November 16, 2017 8:42AM CST

With two days closing slightly higher, the short term trend has turned sideways to positive. The bull gap from November 6 is holding for now, and has slightly bullish implications. The first level of resistance is seen around 3.141. A close above 3.231, the second resistance level, can signal the start of another leg higher toward a target of 3.285. Support once again will be seen at 3.050 at the top of last week’s gap. Below that 3.000 can be used as second support and stops for longer term bullish plays. Momentum studies are at mid levels.

Today’s storage number calls for draw of -15 bcf this week well below the 5-year average. The 5-year average is for a 12 bcf injection. The draw won’t make a big difference in overall storage, but people trade off the reported number. A draw of more than -15 may spark buying, whereas a surprise injection may cause a decrease. Warmer weather was prevalent yesterday across the US. Chicago had a high near 50 degrees. Today however, more seasonal temperatures return and highs should struggle to hit 40. Normal temp’s going into the weekend are predicted. I’m still in the bull camp, with careful long plays or call options suggested.

 

Dec '17 Natural Gas Daily Chart

Dec '17 Natural Gas Daily Chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.