$2.43 continued to be a stubborn resistance level for the AugustNymex contract on Thursday, as yesterday marked the fourthconsecutive day the spot month failed to move above this key shortterm price objective. On the other hand, Thursday was also thefourth day in a row that August failed to move below key technicalsupport at $2.32. The inability for August to move significantly ineither direction helped lead the contract down 1.7 cents to settlethe day at $2.349.
One analyst thinks current fundamentals are keeping natural gasfutures prices at bay. “It’s getting to the point where bullishweather news is neutral for natural gas prices. There has beenlittle correlation between spiking electricity prices and the gasmarket. I think the storage surplus to last year has a lot to dowith that,” the analyst said. However, he further noted the heat iskeeping Gulf Coast cash market prices near indexes in themid-$2.30s, and as long as contango market conditions continue,which he argued they should for this time of year, then Augustprices should be priced at least that high.
Traders continue to keep an eye on a possible developing headand shoulders trading formation, which boasts a neckline at $2.32.”Any significant drop or settle below that would most likely leadto pretty good selling, especially by funds, who are alreadyslightly net long,” the analyst continued.
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