NGI Archives | NGI All News Access
Futures Back Above $4.00 on Heat and Techs
Notching its first back-to-back price advance since mid-May, natural gas futures shot higher at the opening bell Monday as warmer-than-expected temperatures prompted commercial buyers to pressure the July contract through several layers of resistance. After the initial buying surge, however, the market quieted considerably, leaving prices to shuffle sideways throughout much of the session. July finished at $4.069, up 13.9 cents for the day.
Hot weather in the state of Texas and a well-bid over-the-counter market were two factors contributing to the Nymex price rise, sources said. After gapping higher at the opening bell, the market chopped sideways as firm buying pressure by Enron and El Paso confounded attempts by locals to squash the early rally, said Nymex local Ira Hochman of Trot Trading Corp. By virtue of its $4.105 high yesterday, the July contract filled in the May 24-25 gap from the July daily chart.
The next level of resistance, according to Hochman, is $4.13-14, followed by more robust selling ahead of the $4.22 area. If achieved, a move above the $4.22 level would connect the market with the sideways development pattern from May 7 through May 18.
Looking ahead, Cynthia Kase of New Mexico Kase and Company believes there exists an 80% chance of the market continuing to correct — possibly as high as the mid $4.40s in the short-run, but ultimately falling to break beneath recent lows. “The shallower the correction is, the more bearish the outlook will be. If the correction rises no higher than the low-$4.20s, then we expect $3.67 to break and for prices in the mid- $3.50s to be tested.”
However, if prices are able to break the important demarcation point at $4.47, Kase looks for an extension up to $5.00, before the market turns lower.
Â©Copyright 2001 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.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |