Published Wednesday afternoon, 10/17/12

Natural Gas traded higher settling $3.47, up $0.033 0.9%. The curve was mostly firmer (outside of X/F $0.027 weaker, UNG concludes tomorrow), J13/F14 $0.017 firmer, 14/16 little changed. J13/F14 -$0.528 approaching highs ~$-0.52 (charts/seasonality below). Hub cash was ~$0.19 back this morning, Z-6 down $0.05 to $3.40. The 12z was cooler overall as the cold front during the 6-10 day was stronger (Midwest/Northeast cooler) and the Western Trough was deeper than overnight run bringing cooler temps late next week West. The 11-15 day was cooler Central/South and warmer West Coast. Tomorrow we are expecting an injection of 50 Bcf, lower than 2011’s 103 Bcf injection and the 5-yr average 74 Bcf injection. This week’s # will lower the YoY and 5-yr storage surplus to ~150 Bcf and 250 Bcf.
Vol was offered today: (X12 345 16.00 17.50 36.77% -1.43% Z12 380 34.00 36.00 35.34% -0.78% F13 395 46.00 48.00 33.86% -0.38% G13 395 55.50 57.50 33.66% -0.12% H13 395 61.50 63.50 33.10% -0.30% J13 390 63.50 65.50 31.47% -0.06% K13 390 67.50 69.50 30.61% -0.09% M13 395 72.50 74.50 29.98% -0.11% N13 400 77.00 79.00 29.64% -0.13% Q13 400 82.00 84.00 29.79% -0.14% U13 400 88.00 90.00 30.31% -0.16% V13 405 94.50 96.50 30.77% -0.01%). Technical’s have turned bearish but are short-term oversold. Resistance is found at $3.55, $3.64, $3.75. On the downside we see support at $3.32, $3.23, $3.16, $3.07, $2.95.

(NGJ13-NGF14): approaching spread highs ~-$0.52. We’d look to be a scale in a buyer (buying F13) as seasonally spreads move out through the end of November.

Editor’s Note: Natural Gas Commentary readers who are equity investors/traders only can gain access to the energy space through the following exchange traded funds (ETFs).

Natural Gas ETFS

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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