Quiet Day-Session Gives Way to Weather-Induced Buying
Without much in the way of fresh fundamental news, natural gas futures limped lazily lower during the regular open-outcry session yesterday after an early foray to the $7.85 level failed to attract additional buying. With that, the January contract notched its third down-day in a row, closing 12.4 cents lower at $7.413. Estimated volume of just 51,593 was evidence of a price move that lacked conviction, traders observed.
However, that apathy was quickly replaced by bullish euphoria late yesterday afternoon when fresh 30- and 90-day weather outlooks were released. According to the National Weather Service, below normal temperatures are expected over densely populated areas from Pennsylvania and York State across the upper Midwest and Great Lakes regions to include Minnesota. Also of bullish influence yesterday was intermediate-term forecast. Corroborating earlier reports of a second blast of Arctic air, the NWS six- to 10-day forecast calls for below normal temperatures across the eastern two-thirds of the country through Christmas Eve.
The market reacted to the news quickly with the January contract leading the charge. By 8:30 p.m. (ET) last night the prompt month was 48.7 cents higher at $7.90, recouping about one-fourth of the value it lost during the last three days.
In daily technicals, January has resistance at prior highs of $7.95 and $8.35. Once through those levels, a recovery to psychological resistance at $9.00 would be next on its agenda. On the downside, the market needs to pierce back into the still-to-be-filled chart gap between $6.82 and $7.20 created by the Dec. 4 open.
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