Natural Gas Price "Jail Break" on June 11

Natural Gas Price "Jail Break" on June 11

Postby dan_s » Fri Jun 11, 2021 11:40 am

Natural Gas Daily
June 11, 2021
Prices Break Out
"Following several days of indecision, natural gas futures for July are breaking out today, bursting through previous resistance at $3.20 and surging 4.2% to $3.28/MMBtu. The July contract is not alone in this morning's move to new highs. Contracts throughout the coming year are extending recent rallies, most notably upcoming January 2022 futures which have broken above $3.50/MMBtu for the first time in today’s move. July is now set to challenge previous front month highs from last winter, where it is likely to find resistance between $3.30 and $3.40."

At the time of this post all nine months of the NYMEX Strip for HH gas (JUL21 to MAR22) are over $3.25. MY TAKE is that this is a short covering rally triggered by the weather. To sustain the rally we will need weekly ngas storage builds that are below the 5-year average causing the deficit to the 5-year storage level to grow. California my be looking at rolling brown outs for months, which will draw a lot of media attention.
Dan Steffens
Energy Prospectus Group
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