Daily GPI / NGI All News Access

Speculative Buying Boosts Futures into Weekend

Speculative Buying Boosts Futures into Weekend

After watching prices tumble 10 cents in a tumultuous last hour of trading Thursday, bulls were quick to assume control of the market Friday as they continued to add to their already hefty long positions. The September contract finished at $2.698, up 5.1 cents for the day and 15.5 for the week.

Looking ahead, traders are still divided on the issue of market direction in the days and weeks to come. "The next move is down," exclaims Susannah Hardesty of Indiana-based Energy Research and Trading. "Prices peaked on the second top of the huge roller coaster, (double topped at $2.75, testing the $2.72 highs of last week) and dropped significantly into the close of trading Thursday," she wrote in the Aug. 5, 1999 Natural Gas Weekly Report. Her prediction is based on a number of factors including the failure to remain above historical chart resistance at the $2.725 high made on April 8, 1998, and the bearish storage and weather she looks for this week.

However, Ed Kennedy of Miami-based Pioneer Futures disagrees that the $2.72 and $2.75 highs from the last two Thursdays represent a double top and maintains that by making a higher high the market is still firmly in an uptrend. But before the market is able to tack on sizable gains, it may have to check lower, possibly as low as the mid- to upper $2.50s, he said.

But many traders believe that if the market is going to make new highs, it will need to receive a boost from the weather. According to Brad Nesiba of Omaha-based Strategic Weather Services, that could come later this week, when above-normal temperatures find their way eastward.

"A trough of low pressure across the Northern Plains on the 18th and 19th should squeeze hot air back into sections of the Mid-Atlantic and Northeast by next weekend. But this system will not stick around like the last one so the above-normal temperatures will be relatively short-lived," Nesiba said. Will Texas see any relief? "Don't bet on it," he continued. "At this rate the only thing that will cause temperatures to moderate in Texas would be some sort of tropical activity in the Atlantic or Caribbean. And even that looks to be at least 2-3 weeks away."

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus