Less than Expected Draw in Natural Gas

March 29, 2018 10:11AM CDT

Natural gas is riding a four-day uptrend.   Nearby support is at 2.600-2.610.  After that, December’s low of 2.504 is long-term support.    2.831 is resistance.   A close above the resistance number could signal a run to the January highs of 2.951.  RSI and MACD are trending up and could help a move to the upside.   A close below 2.600 will may signal a selloff to the previous lows, sub 2.500 can be a realistic target.

The near-term forecast is for cool weather, but spring time signals for less heating demand.   Demand for electricity for cooling still hasn’t kicked in.  So, the bulls will have some other news to keep grip on the market.  Funds have a good size net long position, so before the demand decreases for heating, they might want to take profits.  A draw of -75 bcf is expected.  This is slightly larger then average and may support the market today.  The 5-year average is closer to -50 bcf.  Going into the long Easter weekend, I’d be cautiously long today.

Natural Gas May '18 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.