Resistance

After ping-ponging between support at $6.875 and resistance at $7.19 for the previous seven trading days, May natural gas futures on Friday ended the week’s trading with an escape to the upside. Influenced by the strength in the petroleum complex, the natural gas prompt month peaked at $7.245 in afternoon trading before settling at $7.195, up 16.3 cents on the day and 19.8 cents higher for the week.

Gas producers stand warned to count on facing determined environmental resistance every step of the way if the British Columbia and federal governments press ahead on plans to end a 33-year-old ban against drilling in the offshore of the Canadian West Coast.

Trading on Wednesday looked much like it did Tuesday as April natural gas once again ping-ponged between resistance and support. Bolstered by a record day in crude futures, the natural gas prompt month was unable to get below the $7.06 low on the session, despite multiple attempts. April ended up settling at $7.192, up 1.3 cents.

After venturing above the psychological $7 level in Monday morning trade, November natural gas futures slipped lower. Following the lead of petroleum futures, the natural gas prompt month began its descent at 11 a.m. (EDT), settling at $6.806. Despite the drop from the $7.03 high on the day, the prompt month still squeezed out a 9.7-cent increase on the day.

Despite closing almost 2 cents up on the day, some market-watchers considered Tuesday a loss for August natural gas futures as morning trading levels as high as $5.96 could not be sustained. The prompt month tapped out at $5.805 on the downside in afternoon trading before settling at $5.837, up 1.9 cents on the day.

Following its test of the $6 resistance on Monday, May natural gas futures finished the week on a four-day slide lower, closing 12.4 cents down on Friday at $5.610. Some analysts looked to the country’s current weather pattern, as well as the storage situation, for answers, taking into account Thursday’s slightly bearish EIA storage report.

After weeks of flirting with the $6 resistance level, May natural gas futures finally broke it Monday, spending a majority of the day above May’s previous high of $5.99, which was set on April 1. The prompt month settled at $6.009, up 6.8 cents on the day, while trading within the $5.890-6.030 range.

After dropping 5% Thursday in reaction to the overwhelmingly bearish storage news, the natural gas futures market rebounded Friday as traders covered shorts ahead of the weekend. Adding to the bullish euphoria over the expected chill over the weekend, traders were reticent to hold short positions for fear that the market would rally if another round of chilly forecasts were issued Monday morning.

After an initial push higher failed to break above overhead resistance, natural gas futures tumbled lower Wednesday as traders balanced their positions ahead of the most anticipated storage report in nearly a year, which is set to be released on Thursday at 10:30 a.m. EST. Except for a pause near noon EST, the selling pressure was steady throughout the session, pressing the prompt month down to support near the $6.10 level. February closed at $6.15, down 14.1 cents for the session.