October contract natural gas prices jumped just less than 2% on their final day of trading, moving right off the support level we had been tracking all week.
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To our subscribers this recovery did not come as much of a surprise, as we saw a number of elements come together to push prices higher. A recent trend has been for the strip to rally into a contract expiry (something we have published Notes on). Power burns have been extraordinarily impressive, and we even saw a bit more bullish weather risk on long-range guidance and our atmospheric indicators. Our active subscribers had all this summarized before the market move this morning, when our morning text alert went out to their phones just before 7 AM EDT.
Then attached in our Morning Update at 8 AM EDT was a chart showing how the April 2018 contract was holding on just above its 30-DMA for support, and that the buying we were seeing along the strip (including for J8) indicated upside through the day.
Of course, these factors were just a couple pieces of the puzzle. But we had continued to note earlier in the week that medium and long-term weather was acting as a headwind for the market, eliminating a significant amount of heating demand, and just today a bit more long-range cold risk had arrived. This comes ahead of an EIA print that is expected to be quite tight, thanks in part to far warmer weather across much of the East last week elevating cooling demand.
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