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

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