RJO FuturesCast

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Energies

Weather Moves Natural Gas

Posted 01/18/2018 11:38AM CT | Jeff Ratajczak

Wednesday’s bullish price action has turned the trend up in the short term. The pivot target just below 3.300 was hit and if that high holds we should see sideways action going into expiration. If Thursday’s close is above 3.320 we could see extension to the 3.500 mark. Support on the nearby charts is a little above 3.120 or so, then again around 2.800 on a weekly chart. A close below 2.920 may signal a sell off back toward the bottom of the trading range. Momentum studies are in the overbought range on a daily chart. Once they turn it could signal an accelerated sell off.

Weather had everything to do with prices Wednesday. There were abnormally low temperatures across the Southern US. Record or near record lows were recorded across Texas, Louisiana, and Alabama. This shouldn’t last beyond the weekend. Winter is releasing its grip in the Northeastern US, and temperatures in the short term forecast are above normal heading into the new month.

A -201 bcf draw is expected this week when the  storage number comes out. The average of the last five years is -203. I believe that the market is over priced and should sell off with an average storage number.

Natural Gas Feb ’18 Daily Chart

natural_gas_feb18_daily_chart

Jeff Ratajczak

Jeff attended Illinois State University. In 1993 Jeff began his financial career in the stock market as a retail broker. He transitioned to futures in 1999 with LFG Intermarket Group, which became ZAP Futures. In 2004 ZAP Futures was acquired by RJO Futures' parent company R.J. O'Brien. Jeff's focus is to assist clients in managing risk and speculate through futures and options strategies.