Natural Gas News: Futures Slide as Weather Fails to Offset Inventory Glut
The intermediate and long-term trends are decisively lower with the 50-day moving average at $3.013 and the 200-day moving average at $3.503, providing direction and resistance.
The near-term range is $2.905 to $2.649. Its pivot at $2.777 and the minor swing top at $2.808 are resistance. Overcoming both levels will shift momentum. Taking out the swing top at $2.905 will mean the short-covering is getting stronger.
Any rally from current price levels is very likely to be short-covering. At first glance, the formation tells me that it’s going to take a sustained move over the 50-day MA to get anyone excited about the upside.
Weather Gave Bulls an Opening, Supply Slammed It Shut
Below-normal temperatures across most of the country through early May handed the bulls something to work with. Late-season cold can extend heating demand and in a thin demand period that is enough to move the May contract higher into settlement. I watched it play out Tuesday. May closed modestly higher. June went the other direction. That spread tells you where the real conviction is.
The cold does not change the supply picture and traders know it. This market is heading into the dead zone for demand. Winter heating is done. Summer cooling is weeks away. A cold snap in early May is noise against that backdrop and the June contract priced it that way immediately.