Natural gas futures looked poised to continue to trend lowerlast Friday amid abundant physical supply and having justreestablished the downtrend that began on April 8th. However,weather forecasts calling for the warmest temperatures of thesummer and solid “bargain buying” in the cash market was enough tolift August 3.3 cents to settle at $2.165.
With eight trading days left before the expiration of the Augustcontract next Wednesday sentiment remains mixed as to where Augustwill settle. The Pegasus Econometric Group of New York says thestorage data sends a clear message. “Even the above normalair-conditioning demand seen recently is not enough to dosignificant or lasting damage to the year-on-year storage surplus.Strong though demand be, supply is even stronger.” The group admitsthe longer term forecasts by the National Weather Service showabove normal temperatures for the South, but they remain doubtful.”There is nothing in the forecast strong enough to reverse therecent downtrend.”
Tom Saal of Pioneer Futures in Miami believes it is still tooearly to give up on August. Saal blames the funds liquidating theirlong positions after the August contract moved below the 40-daymoving average Wednesday, rather than the storage report as thecause of the sell-off. “Storage is not as big an overhang on thismarket as some people think because it has already been factoredinto the market. The fact the CFTC commitment of traders report asof July 14th showing non-commercial traders were still net longover 8,000 contracts was taken before the big move down last weekshows they still had some positions to unload.”
©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press,Inc.
© 2021 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |