It has been a while since I discussed the machinations in the natural gas markets. Plainly stated, there just was not anything that interesting going on. Prices have been range bound while supply remained on the higher side of the 5-year average. However, something interesting happened in yesterday's trading. Just look at the chart.
High volume, wide price spread, a close near the high, these are all indicators of a possible trend change occurring. Not to mention that move occurred in or around a swing point in the natural gas contract, solidifying the move even more. More interesting to note was that yesterday's move occurred after the Energy Information Administration stated the lasted weekly storage build came in well North of estimates at 87 Bcf. The contract sold off initially on the news, but rallied sharply there after.
The move indicates to me a change in trend in natural gas contract and that traders are expecting some combination of lower supply, higher demand, much cooler winter temperatures, or some disruption in the shale-gas plays.
High volume, wide price spread, a close near the high, these are all indicators of a possible trend change occurring. Not to mention that move occurred in or around a swing point in the natural gas contract, solidifying the move even more. More interesting to note was that yesterday's move occurred after the Energy Information Administration stated the lasted weekly storage build came in well North of estimates at 87 Bcf. The contract sold off initially on the news, but rallied sharply there after.
The move indicates to me a change in trend in natural gas contract and that traders are expecting some combination of lower supply, higher demand, much cooler winter temperatures, or some disruption in the shale-gas plays.
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