Psychological

After banging on the psychological $8 resistance price level over the previous five sessions to no avail, the sixth attempt proved to be the charm as February natural gas futures punched upward to a $8.180 high before closing Wednesday’s regular session at $8.099, good for a 13.2-cent gain on the day.

Psychological support at $7 held up once again on Tuesday for January natural gas futures, but the talk among traders seemed to indicate that the last stand could be right around the corner as temperatures are likely to warm up in the latter part of December. The prompt-month contract closed Tuesday at $7.085, up 5.3 cents from Monday.

After failing to break through psychological support at $7 over the previous three sessions, natural gas futures on Thursday decided to check out the upside for a change as the January contract reached a high of $7.425 before closing out the day at $7.330, up 14.5 cents from Wednesday’s finish.

June natural gas futures assaulted the psychological $8 resistance level to no avail for a second consecutive session Friday as market bulls were looking to finally put the $7 to $8 range that futures have recently been stuck in firmly in the rear-view mirror. After recording an $8.100 high on the day, the prompt month retreated lower to record a $7.850 low before settling at $7.938, down almost a penny from Thursday’s close and 10.7 cents higher than the previous week’s finish.

After plunging lower Thursday morning to temporarily threaten the psychological $7 level following the Energy Information Administration’s (EIA) 132 Bcf storage withdrawal report, April natural gas rebounded later in the session to settle at $7.288, down 1.2 cents from Wednesday.

Adding more credibility to the view that the psychological $8 level could be a top, bullish natural gas futures traders on Friday were unable to push the March contract above $7.920 during a quiet, week-ending trading session. The prompt month traded a slim 11-cent range from $7.810 to $7.920 before calling it a week at $7.827, down 4.4 cents on the day but 35.1 cents higher than the previous Friday’s close.

It looked like an “after-Christmas sale on natural gas,” one analyst observed, as January futures plunged below the psychological $6 level in overnight Globex trading and continued the trend during Wednesday’s open outcry session. In its last day as front month, the contract recorded a low of $5.740 before expiring at $5.838, down 27.5 cents on the day. The February contract shed 19.1 cents to close at $6.142.

After January natural gas futures failed to stay below the psychological $7 level on Tuesday, traders made sure the move to sub-$7 levels stuck on Wednesday. The contract spiraled to a low of $6.760 before settling at $6.769, down a significant 31.4 cents on the day.

After dipping below the psychological $7 level in Monday’s overnight electronic trading session on Globex, traders on Tuesday were unable to muster any follow-through selling. However, they also were not able to create any real rally as the prompt month ended up closing out the day at $7.083, up eight-tenths of a cent from Monday’s close.