Yet again today natural gas prices traded within a tight range, moving very little. On a technical basis, we have seen prices sitting right near support, which was still not broken today even with the October contract options expiry.
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October contract prices remain below all major moving averages heading into the expiry tomorrow, and actually sit just below Henry Hub cash prices as well.
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Yet on this very slow day, one thing we did take note of was that there was a small rally in prices into the options expiry settle. Of particular interest was the fact that this rally was winter-led, albeit small, so that it was the winter strip that closed up the most on the day.
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Not only that, but into the end of the day we did see latter portions of the strip perk up as well, with a number of key spreads flat on the day.
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Given the day's lackluster price action, as well as the prompt month weakness and steady selling through the middle of the trading day, it is important not to read too much into this. Still, though, following recent losses bulls can use all the help they can get, and a small winter-led bounce into an options expiry settle certainly is not bearish.
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