Natural gas futures closed lower Monday after an opening run that took prices to the highest levels in two weeks. Reports of cooler weather in the latter half of the six- to 10-day period aided bulls, but realization of ample supplies quickly tempered their enthusiasm and prices fell. Traders also noted a continued bearish technical environment. The November contract fell 4.5 cents to $6.741 , and the December contract dropped 8.5 cents to $6.991. November crude oil rose $2.40 to $74.25.

Technicians who utilize moving averages noted that the run higher was not sufficient to generate any kind of buy signal. “A close in the December contract above $7.30 would be required to get me out of my short [positions],” said an Oklahoma City broker analyst. He added that would only put him in a neutral position relative to the market, but “a close above $7.55 would interest me in getting long the market,” he said.

From a fundamental standpoint the broker noted that “there is some cold air in Alaska, and that is sometimes an indication that colder air is on its way. A better outlook for the economy would help, but there is plenty of gas in storage and no demand,” he said.

Others see the market at the end of its decline from nearly $14 in early July. “I think the natural gas market is bottoming,” said a California broker. “It’s looking at the idea that the natural gas market is a proxy for the economy, although today that dynamic was not clear. Natural gas was up about 20 cents and crude pulled back to flat. Crude oil then rallied about $4 and then pulled to about $2.25 higher, and natural gas went flat to lower and then down in the back months. I’m not sure what that meant,” he admitted.

The Dow Jones Industrial Average gained 413 points Monday to close at 9,265.

In spite of Monday’s lackluster performance, weather bulls are hopeful that by the time the back half of the latest six- to 10-day forecast rolls around, traders will get a healthy reminder that winter is just around the corner.

According to MDA EarthSat, the early part of the forecast begins with unsettled weather across the East, keeping daytime temperatures lower and overnight lows warmer. “The stronger anomalies come during the second half of the period, however, as the jet pattern across North America becomes more amplified. With that, stronger warmth builds across the West, but cooling demand should be limited to the Southwest and California.

In the East, there is a strong chill late as northwest flow funnels between low pressure near Hudson Bay and high pressure in the southern Plains/Lower Mississippi Valley,” said meteorologist Matt Rogers.

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