The trend in June is putting natural gas in a sideways channel until yesterday’s upward push. Today’s price action may be starting another leg higher. Resistance above 3.31, if broken may signal rallies to 3.380 and above that to 3.45. A close under 3.31 will continue the sideways to slightly up trade action, while a close below 3.20 is needed to reverse the upward trend and trade to a lower range. Momentum indicators are all up from mid levels and heading North, supporting a move higher.
Today’s storage numbers showed an infusion of 45bcf. V. an expected build of 52bcf. This usually means less gas at a higher price.
China is leaning toward more natural gas usage. They have been making coal prohibitively more expensive compared to gas by restricting imports. If Chinese gas imports become reality instead of rumor, we may see natural gas trade in the next higher range consistently.
Weather is between heating and cooling seasons. This keeps demand low. The forecast going into the weekend is for slightly below normal temperatures. Next week, the temps turn up and we may see some readings in the low 80’s. Cautiously bullish plays are recommended for the upcoming week.
Jun ’17 Natural Gas Daily Chart