Psychological

Continuing its little streak of recent weakness, July natural gas futures followed crude values lower on Monday, piercing the psychological $4 price level before closing at $3.933, down 9.9 cents from Friday’s finish.

Traders looking for the expiring May natural gas futures contract to test psychological support at $3 were sorely disappointed Tuesday as it instead finished its run by gaining 6.8 cents over Monday’s close to terminate at $3.321. The June contract, which takes over Wednesday as the prompt month, added 7.8 cents to close at $3.440.

April natural gas futures values continued to sink Tuesday despite a morning attempt to break back above the psychological $4 level. After running up in impressive fashion to notch a high of $3.956 just after 10 a.m. EDT, momentum stalled and the contract ended up closing out the regular session at $3.840, down 2.5 cents from Monday’s finish.

After warding off the March contract in its last week of trading, psychological support at $4 proved to be a similar Achilles heel for April futures bears on Friday. The contract traded below that price level for most of the morning before rallying in the afternoon to close at $4.198, up 12.1 cents from Thursday and 16.2 cents higher than the previous week’s finish.

A surprise 16 Bcf natural gas storage injection from the Producing region for the week ended Feb. 13 was putting significant downward pressure Thursday morning on psychological futures support at the $4 level. Shrugging off an almost $5/bbl gain in crude futures, March natural gas futures ended up closing out the day’s regular session at $4.078, down 13.6 cents from Wednesday’s close.

Coming into expiration Monday, January natural gas futures continued the trend of gains from Christmas week by punching above the psychological $6 resistance line to go off the board at $6.136, up 31 cents from Friday’s close. Taking over as the new front-month contract, February futures also breached $6 on Monday to close at $6.084, up 27.2 cents from Friday’s session.

Monday’s test of psychological support at $6, a nip in the air and a strong rebound in equities combined to push November natural gas futures higher on Tuesday. The contract, which expires Wednesday, put in a high of $6.302 before settling Tuesday’s regular session at $6.186, up 6.5 cents from Monday’s close.

Despite venturing above psychological resistance at $8 for the second time in as many days, October natural gas futures once again retreated as traders have recently shown a fair amount of comfort with prices between $7 and $8. The front-month contract, which expires Friday, traded between $7.605 and $8.093 during Wednesday’s regular session before closing out at $7.679, down 25.2 cents from Tuesday’s finish.

After a mostly quiet session of straddling the psychological $10 price level, May natural gas futures on Monday lurched higher to close at $10.053, up 15.2 cents from Friday’s close. The renewed push has some market experts seeing even higher prices this time around.