May Natural Gas Futures Post Contract High

April 5, 2013 10:22 AM
 

bullmarket 

May '13 natural gas futures moved strikingly higher today to approach highs not seen in 19 months. Storage data released by EIA earlier this week showed a drawdown of 94 billion cubic feet. This is winter's long tail swinging around to snap at the market.

Profit takers in long positions will likely continue to play these swings as this May contract has given them plenty of action. Volume was very high today as buyers saw an early morning uptick as an indication of where the contract was headed. That uptick, when taken in consideration with EIA's report that natural gas stockpiles have fallen below the five-year average made the move a cinch to call.

The contract is expected to remain above four dollars now until some meaningful weather data suggests these seasonal drawdowns are behind us. This is a weather rally at its finest. With a little luck, these prices should inspire production increases, but a rush to fill the chunk March took out of the national supply runs the risk of outrunning investor appetite for risk. If too much natural gas floods the market in response to drawdowns, the bottom could fall out of this May '13 contract.

May 2013 natural gas opened today at $3.93 and added $0.20 (4.64%) to set a new contract high at $4.13.


Photo credit: wallyg / Foter.com / CC BY-NC-ND

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close