Natural Gas Holds Near Resistance
The May natural gas contract gapped up slightly last evening, attempting to pull back from resistance this morning before continued firm cash prices appeared to help pin prices near flat on the day.
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For the first time, though, it was not the prompt month May contract that led through the day but rather the second June contract that took the lead.
Accordingly, the K/M spread ticked down decently on the day even as the front of the strip ticked higher from last week.
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Prices have been supported by a bullish EIA print that surprised last week and expectations of another draw to be announced Thursday when seasonally we would see a rather large injection. Dominion Transmission has already announced that for the week ending April 19th they withdrew 1 bcf of gas from storage, whereas in the same gas week last year they injected 8 bcf of gas.
This comes as GWDDs last week were very significantly above average yet again, just ticking slightly lower from the week before.
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The role of the bullish weather can clearly be seen as well in the recent price action of the May/October K/V natural gas spread, with bullish weather propping up the May contract significantly when compared to the October contract.
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