Natural Gas Outlook
Natural Gas traded higher, settling $3.287 up $0.089 2.7%. The curve was firmer, 13/16 $0.03 tighter (J13/F14 $0.02 better). Hub cash was ~$0.03 back this morning, Z-6 fell to $1.00 to $4.80. The 12z was warmer than overnight models across the Central and Southeastern U.S. The Western U.S. was slightly cooler during the 6-10 day. The 11-15 day was significantly warmer East Coast and upper Midwest. The EIA reported a withdrawal of -135 Bcf, bullish vs market expectations ~-130. The withdrawal was bullish vs last year’s 76 Bcf withdrawal and the 5-yr average 113 Bcf withdrawal. The YoY and 5-yr surplus tighten to 45 and 361 Bcf. Next week we expect ~195 Bcf withdrawal, bullish vs 2012’s 95 Bcf withdrawal and the 5-yr average 122 Bcf withdrawal. Baker Hughes reported NG rigs rose 8 to 439 (GOM unch, ND -1, PA +3, TX +4).
Vol was offered overall: (G13 330 23.00 23.00 33.40% -2.95% H13 330 34.50 35.50 34.92% -2.03% J13 335 43.00 44.50 34.81% -1.67% K13 340 51.00 52.50 34.52% -1.74% M13 345 58.50 60.00 34.32% -0.91% N13 350 64.50 66.50 34.27% -0.91% Q13 355 71.00 73.00 34.24% -0.42% U13 355 76.50 78.50 34.30% -0.70% V13 360 82.00 84.00 34.22% -0.71% X13 370 83.00 85.00 31.79% -0.39% Z13 390 86.00 88.00 29.88% -0.35%). Technically we are bearish, $3.05 should be tested again (V/X roll). Resistance is found at $3.29, $3.45, $3.56. On the downside we see support at $3.17, $3.05.
Editor’s Note: Natural Gas Commentary readers who are equity investors/traders only can gain access to the Natural Gas space through the following exchange traded funds (ETFs).
Natural Gas
United States Natural Gas Fund (UNG, quote)
United States 12 Month Natural Gas Fund (UNL, quote)
First Trust ISE-Revere Natural Gas Index Fund (FCG, quote)
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