Natural gas futures were stronger at the open and close yesterday as traders priced in the impact of the first real blast of hot weather across central portions of the country. Nearly gapping higher with its $4.36 opening trade, the June contract sifted slightly lower for much of the day before rebounding convincingly at the closing bell. In doing so the prompt contract not only closed 11.6 cents higher at $4.394, but also managed to fill in the chart gap up to $4.44 on the daily prompt chart.
According to the latest six- to 10-day forecast released yesterday by the National Weather Service, above-normal temperatures are expected across a large swath of the country extending from Washington and Oregon all the way south and east to central Florida. Included in this area is the entire state of Texas, most of the Rockies, the Great Plains and parts of the Midwest. In fact, the only areas of the country not expected to see above-normal readings by this weekend are the Northeast, the upper Great Lakes, the southern tip of Florida and California and New Mexico.
The weather-related news created a bit of a muddled fundamental picture for the first time in months. While market-watchers agree that the forecast is solidly in bulls favor, they are a little fearful that another bearish storage number Wednesday will dampen that euphoria. That uncertainty, coupled with the market’s failure after the strong opening print yesterday, prompted traders to be a little hesitant to upside throughout much of the session. However, patience paid off for the bulls yesterday because just when it looked as if June futures would close beneath its open, the market spiraled higher in a last minute short-covering rally.
As it turns out, that was all the impetus the bulls needed, because the June contract continued higher in after-hours Access trade, rising 6.6 cents to $4.46 by 7:00 P.M. (EST).
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