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June Futures Reach Bottom of Trading Range
The June Nymex contract lost another 4.4 cents to $2.134 Monday,as traders continued to test just how long the spot month can holdabove major technical support at $2.11. June reached a low of$2.125 yesterday before last minute buying pushed the contract toits higher settle.
June took the relatively strong hit despite cash market pricesat the Henry Hub that are at either side of $2.20. However, as onemarketer reminded, those cash sales are for May delivery, not forJune. “There is tremendous heat in the south right now. A dozenLDCs or so bought huge loads of spot gas from us today, but thereal inherent problem is storage. People have been putting so muchgas in storage lately that some of the facilities, especially thesalt domes, are starting to get full. That means you may seeinjections slow off, or people start selling some gas from storage.Either way, that’s probably not going to be too productive forprices in the short term. That’s why I don’t think you see Junefutures climb any higher than $2.30,” he said.
A technician was a bit more specific, setting resistance in the$2.27-285 area. If June does manage to dip below support at $2.11,look for secondary resistance at $2.05 and $2.00, he said. Butbecause June is at the bottom of its current trading range, andbecause there was a good bit of buying just before yesterday’sclosing bell, he expects further buying at this morning’s opening.
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