Natural Gas Continues Uptrend with Subzero TemperaturesPosted 01/03/2018 2:16PM CT |
Natural gas for February delivery is still in an uptrend. Prices just below the 3.000 handle are seen as the first level of resistance. If the 3.000 is rejected today, we may see either a consolidation or sell off going into tomorrow’s storage report. A close above yesterday’s high 3.097 will signal a move to a higher trading range (3.100- 3.300). A close below 2.900 support should be sufficient to stop advances and turn the trend negative. The crossover of the 9 and 18-day averages suggest the continuation of the short-term uptrend. Momentum indicators are turning lower, possibly signaling a move lower in prices.
Weather forecasts still show well below normal temperatures until the weekend. Chicago’s forecast calls for lows in the single digits to subzero temps until Sunday. Sunday is forecast to be above freezing for the first time in weeks. Sunday’s warmer temperatures may slow the heating demand and with it the current uptrend. The recent uptrend may be due to the recent cold spell, but I suspect it might be short covering from the recent slide in natural gas prices. A draw of -220 bcf is expected tomorrow. I’m cautiously bullish below 3.300.
Natural Gas Feb ’18 Daily Chart