NYMEX gas up sharply, fronts hit new highsgreenspun.com : LUSENET : TB2K spinoff uncensored : One Thread
Monday March 27, 5:06 pm Eastern Time
NYMEX gas ends up sharply, fronts hit new highs
NEW YORK, March 27 (Reuters) - NYMEX Hub natgas ended up sharply Monday in moderate trade, with front months driven to new highs by a surge of technical buying when key resistance was breached late in the session, industry sources said.
April climbed 7.8 cents to close at $2.914 per million British thermal units after hitting a new contract high late of $2.935. On ACCESS tonight, the soon-to-expire spot contract rallied to another new high of $2.963. May, which also saw a new benchmark high today of $2.96, settled 7.6 cents higher at $2.938, then climbed to $2.99 on ACCESS. Other months ended up 2.5 to 7.3 cents.
``Both locals and funds were buying today, but we really took off when stops were triggered above $2.905 (basis April). We could see some liquidation before the AGAs and the April expiration on Wednesday, but it looks like the market technically is breaking out,'' said one Midwest trader, adding gas pipeline work scheduled next month plus coal and nuclear plant maintenance could prop up the market despite tapering demand as warmer weather arrives.
Early withdrawal estimates for Wednesday's weekly AGA storage report range from 15 bcf to 50 bcf. For the same week last year, stocks declined 37 bcf.
Though some still expected milder weather to soon pressure the market, most said concerns about storage, production and pipeline and plant maintenance should limit any downside.
A Reuters survey Friday showed that total nuclear generating capacity off line for refueling and/or extended maintenance was 25 percent above year-ago, down from 33 percent last Tuesday but still a supportive number, traders said.
WSC expects mild East Coast temperatures Monday to moderate to normal to six degrees F above normal later in the week. Midwest readings will climb to as much as 12 degrees above seasonal Monday, then slip to two to six above Thursday-Friday.
The mercury in Texas will range from one to eight degrees above normal through Wednesday, then cool to near normal later, while the West will see mostly above seasonal for the period.
The NWS six- to 10-day forecast released Monday calls for normal temperatures for most eastern states and Texas, with above normal expected in parts of the Southeast and Gulf Coast. Below normal readings are predicted for most of the Midwest and West.
Technical traders agreed the market broke key resistance today on decent volume, but most needed a higher close tomorrow to turn bullish.
April resistance was now pegged at the psychological $3.00 mark. Further selling was expected at $3.13 and $3.275, two prominent spot continuation chart highs from last year.
Minor April support was seen at $2.81 and then at the $2.71 double bottom, with major buying expected at $2.67, a prominent low from two weeks ago.
But with April set to go off the board Wednesday, more traders focused on May, where resistance was now seen at tonight's ACCESS contract high of $2.99. Psychological resistance also was seen at $3.00. Last year's spot chart highs of $3.13 and $3.275 should be enough to block further upside until hotter weather spurs better cooling loads, traders said.
May support was pegged at last week's low of $2.74 and then in the $2.70-2.71 area which is the March low and the 40-day moving average. Intermediate trendline support also falls in the low-$2.70s. Further buying should emerge ahead of the $2.515 prominent low from February 23.
In the cash Monday, Henry Hub swing quotes on average were little changed in the low-$2.80s. Midwest pipes firmed three cents to the mid-$2.70s. In the West, El Paso Permian also was three cents higher in the low-$2.70s.
Swing gas on Transco at the New York city gate was flat to up slightly at $2.99-3.04, while Chicago gained about a nickel to $2.85-2.90.
The NYMEX 12-month Henry Hub strip rose 5.7 cents to a record $3.003. NYMEX said an estimated 74,886 Hub contracts traded today, up from Friday's revised tally of 69,160.
-- - (firstname.lastname@example.org), March 27, 2000