Natural gas continues to make new highs but was unable to hold the rally in the overnight with the weather forecast mixed. The jet stream is expected to dip, with hotter temperatures in the Gulf states and average/below average temperatures in the upper West and Midwest. Above average temperatures are expected in isolated parts of the Southwest and Northeast with the forecast suggesting average demand for cooling. The recent rally in natural gas can be viewed as a technical short covering with the contract near overbought levels, however, less than average injections for the remainder of the season should continue to provide support. Support comes in at 2.78 and 2.76 with near term-resistance at 2.82.

Natural Gas Sep ’18 Daily Chart