Today’s Spotlight Market
It?s a battle of large speculators and commercial traders in the Natural Gas market, as both sides continue to add to their existing net-positions. The most recent Commitment of Traders report shows that non-commercial traders added nearly 20,000 new net-short positions during the reporting period ending August 16. This brings the overall net-short position to just over 136,500 contracts. Commercial traders, on the other hand, added over 23,500 new net long positions during the same time frame, which brought their overall net-long position to over 101,000 contracts. ?
Fundamentals
The Labor Day holiday here in the U.S. is viewed by many as the unofficial end to summer, and if weather forecasters are correct, it could be quite warm for a large swath of the country. The Climate Prediction Center in its 8 to 14 day outlook has nearly ? of the U.S. at above or well above normal temperatures through September 5, with only the northwest portion of the U.S. expected to see normal or below normal temperatures during this period. This ?heatwave? should produce increased electricity demand used for cooling, which in turn should boost the demand for Natural Gas, as it is the preferred fuel for many power producers. On top of the looming heat wave, we are entering the peak of the Atlantic Hurricane season, and the National Hurricane Center is currently monitoring two named storms out in the Atlantic in what is expected to be an active storm season. While Natural Gas production in the Gulf of Mexico is not as important as it once was prior to the fracking revolution that has occurred, any gas production issues will be supportive to prices, which have already rebounded off the 2016 lows made back in March.????? ?
Technical Notes? -? View Today’s Chart
Looking at the daily chart for October Natural Gas futures, we notice prices have been in a modest uptrend the past several trading sessions, following a sharp sell-off earlier this month. Prices have rebounded above the 20-day moving average, and we are starting to see trading volume increase as prices move higher. The 14-day RSI has turned neutral, with a current reading of 57.87. The high made on July 29 at 2.947 looks to be the next resistance level for the October futures, with support seen at the August 12 low at 2.580.??
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