Wild Start to Week For Natural Gas Trading

Wild Start to Week For Natural Gas Trading

By Tim Silas | Reporter

0
SHARE

Volatility continued in the natural gas markets to start the trading week as futures prices for June ’15 delivery gapped up on Sunday night to reach a high of $2.933 per mmBtu.

The gap up, however, failed to hold its move as the commodity’s price faded throughout the night. Shortly before 8:00am EST, prices dropped almost 4 cents before climbing back a penny to $2.845 per mmBtu about an hour before the open of the regular trading session.

After many weeks of gap downs on Sunday night, the gap up was a welcome sign for natural gas bulls who believe the move was a sign of changing momentum.

“The market is completely wild right now,” said a New York floor trader. “While the fundamentals don’t necessarily support the move higher, the market has been beaten down for so long that this type of volatility comes with the territory.”

The recent rally has had some underlying bullish reasons. Warmer weather projected for the second half of May has increased the likelihood of increased natural gas use for power generation. Likewise, the Oyster Creek Nuclear Generation Station automatically shut-down late Thursday which led to an increase in Northeast power burn.

“The real question on everyone’s mind is how much more shorts cover, which has been the real catalyst for the push higher,” said the trader. “So if they stop covering, do we still go higher? That’s the focus right now.”

To contact the reporter for this story, please email tim@natgasinvestor.com.

SHARE

NO COMMENTS

LEAVE A REPLY