Weather, Storage Puts Bulls Back at Helm
After opening at or near lows for the day, the futures market
rallied higher Thursday, spurred by the confluence of bullish
technical and fundamental factors. With a 9.1-cent advance, June
broke through several key resistance levels before eventually
finishing at $2.282 for the day. Estimated volume was a healthy
A Gulf Coast trader said bulls were active in the market
yesterday following the release of the American Gas Storage report.
Taking into account the latest 72 Bcf injection, the year-on-year
surplus now stands at just 103 Bcf. Another Houston-based trader
said gains registered in the physical market also were supportive.
"Utilities were definitely out in the market as buyers [Thursday].
It is hot down here, and cash offers just kept getting hit
throughout the morning," he said.
A Chicago-area trader said forecasts calling for warm
temperatures for the upper-Midwest this weekend were contributing
to the strength. Chicago will see highs in the upper 70s this
weekend according to the National Weather Service. However,
fundamental factors were not the sole reasons for the price run-up
yesterday, he said pointing to Wednesday's and Thursday's lows of
$2.17 and $2.175 respectively. "The double bottom sent a strong
message of rejection to the bearish trend. Plus, June's move higher
placed it back above the 18-day moving average," he continued. The
18-day moving average for yesterday was $2.279.
Looking ahead, the trader predicted a combination of bullish
storage reports and weather news will augment an already
constructive technical picture.
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