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Traders Unconvinced By Firming Natural Gas Technical Case; June Seen 3 Cents Lower

June natural gas opened 3 cents lower Monday morning as weather forecasts show no convincing trends, and risk managers are content to stand aside for the moment. Overnight oil markets rose.

Commodity Weather Group in its morning six- to 10-day outlook shows above and much above normal temperatures from New England into the Ohio Valley extending to the Southeast. A ridge of below normal temperatures is situated along the Continental Divide. "Today's estimated changes from last Friday are a bit stronger than expected thanks to more significant warmer changes in the East and sometimes Southeast, offset a bit by some cooler shifts at times in the West," said Matt Rogers, president of the firm.

"One stronger peak day to watch is Monday next week (day 8) when pre-frontal warming could surge the lower eastern PJM to the upper 80s (we are forecasting 88 F for Washington, DC) with a bit more humidity than expected this week. Texas continues to escape significant heat though and mostly leans toward the seasonal to cooler side with frequent rain risks."

Market technicians contend "the bears have lost control of this market," according to Walter Zimmermann, vice president at United ICAP. "We have now five consecutive bullish daily candlesticks. The weekly candlestick is a bullish engulfing pattern. The candlestick for the month of April is a hammer bottom. Bulls are firing on all cylinders technically. But all this will be for naught if the bulls can not finish what they started. To confirm a bottom bulls need to clear $2.939 (.236 of 4.544-2.443) and $3.0399 (.236 of 6.493-2.443)," the firm said in closing comments Friday.     

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