To the person who said prices were going down further...
EAT THIS BABY.....!
Friday June 19, 2:55 pm Eastern Time
Short cover drives NYMEX natgas higher at midday
NEW YORK, June 19 (Reuters) - NYMEX Hub natgas futures moved up sharply at midday Friday in moderate trade, driven by short covering in the face of stronger weekend physical
prices and warmer weather forecasts next week, sources said.
At 1205 EDT, July was still up 11.1 cents at $2.255 per million British thermal units after rallying this morning to $2.265. August was 11.1 cents higher at $2.275. Other deferreds were flat to up
9.3 cents.
''It's been hot and it's supposed to get hotter next week, so the shorts are covering ahead of the weekend,'' said one Texas-based trader, noting Gulf and Midwest physical prices were up five
to 10 cents today.
But while record heat in the Gulf and warmer forecasts next week for other regions could take prices even higher, skeptical traders said lingering concerns about storage, now 471 bcf, or 34
percent, above year-ago levels, should temper enthusiasm.
Eastern temperatures through Tuesday are forecast to average up to 10 degrees F above normal, with the Midwest expected to climb to as much as eight degrees F above. Readings in
Texas are expected to remain hot, rising to as much as 12 degrees F above normal. Florida will average four to eight degrees above for the period. In the Southwest, temperatures are expected
to warm to several degrees above for the period.
Technical traders noted July blew through resistance this morning in the $2.22-2.235 area, adding a strong finish today would put the spot contract above the 40-day moving average and
send a clear signal to funds and other shorts to cover.
''Technically, if July settles above $2.22-2.23 it would be pretty bullish. No one wants to go home short this weekend,'' a Midwest trader said.
Resistance in July was seen at $2.33, which is a prominent high from mid-May and the 50 percent retracement of the recent leg down from the $2.75 April high. Next resistance was
pegged at $2.38 and then at the $2.65 double-top from April. Support was seen first at $2.09, with psychological buying likely at $2.00. Further support should emerge at $1.97 and then at
last Wednesday's low of $1.915. The prominent spot continuation low of $1.77 from March 1997, should provide more buying.
Record or near-record cooling demand in the Gulf again today and warmer forecasts for other regions next week helped firm the weekend cash Friday.
Gulf Coast weekend quotes gained almost a dime to the $2.15-2.20 area. Midwest pipes firmed more than a nickel to $2.10-2.15. Chicago city gate gas was almost 10 cents higher in the
mid-to-high $2.20s, while New York was up about five cents to the mid-$2.30s. In the West, El Paso Permian was several cents higher in the low-$2s.
NYMEX said 15,069 Hub contracts traded at 1050 EDT. |
