NG: UNG: BOIL: Natural Gas Upside Potential vs. Bearish Weather

20 окт. 2020 г.

Natural gas NG is getting ready to roll into higher priced December contract, Oct 25-29. The upside potential on a roll is $3.2 price level vs. current $2.8. However, weather forecast is bearish for the rest of the week and into early November. LNGs are higher at 8 bcf/d, but Cameron facility and Sabine pass are still blocked and expected to stay that way for the next a couple of weeks. NGI predicts trough in demand later this week. NatGasWeather predicts low national demand Tue -Fri on warming in high consumption areas. November contract may dip toward expiration.

Technical Indicators: MACD chart has formed a double bottom pointing to higher prices. RSI has potential for a move higher, but may also form an island top with a dip lower before going higher, should traders react negatively to bearish weather forecast for end of October - beginning of November.
The Volume bars on a price chart (see circle on top chart) showed limited buying at $2.8 level. Support for November contract is seen at around $2.7 level. Some analysts see support at $2.595 - $2.572 levels, should weather models lose TDDs later in October.

Higher prices on Monday afternoon were supported by cold shot over Plains and Rockies and trader optimism.