We had a busy day at Bespoke Weather Services today tracking prompt month natural gas prices as they approached a top of their range. We began the day seeing natural gas prices rally even higher following support from cash prices, and prices even briefly ticked above the $3 level for the first time since the 14th. However, as we noted in our Morning Update to subscribers, weather-driven demand risks are extraordinarily bearish in the medium-range with bearish risks holding in long-term and today being the last day over the next couple of weeks where natural gas demand would be significantly above average. This led us to issue a Trade Alert warning just below 8:30 AM that this cash-led rally was likely coming to an end with downside arriving for natural gas prices. 

This Trade Alert ended up verifying well, as prices reversed through the morning as the market continued to price in demand reductions through the next few weeks. Though prices have not quite settled yet, as of 2 PM Eastern this afternoon they look poised to print a rather bearish reversal candle up against the 60-Day Moving Average (though the 30-Day is providing a bit of support). 

“Trader” level subscribers then received a Seasonal Report that looked at forecasts through the next 5 months along with technical analysis of the natural gas curve. In that are our newest charts analyzing natural gas spreads, where we again see that the nearest H/J spread tends to decline this time of year (especially given how wide it currently is). Yet this wideness also seems to indicate that the market is more concerned about walking into the winter season with stockpiles below average than prompt month price action would seem to indicate. 

Along with this came some seasonal trade ideas, end of storage season inventory projections, and seasonal forecasts through the winter season to help natural gas traders hedge weather-related risks or speculate on where the next price movement might be. 

Print Friendly, PDF & Email

Related Posts