Gas Petrospective – September 22, 2010

Natural gas prices were up almost 10 cents yesterday, although they rebounded from lower levels near unchanged. Traders started buying on the development of two storms, Tropical Storm Lisa, and a “weather system” north of Venezuela which Dow Jones reports may have a 50% chance of strengthening into a tropical depression, according to the National Hurricane Center.

As we noted in “Fuel For Thought,” the waters in the tropical Atlantic Ocean are at some of their warmest readings for the last fifty years or so, and that warmth has made it easier for depressions to coalesce into named storms which, in turn, have used the same warmth and moisture to gather velocity and cohesion more quickly than normal. The result has been a virtual conveyor belt of tropical storms forming to the east of West Africa’s coast. And the storms spawned in these warm waters have quickly become ferocious tropical storms and hurricanes. We have just been lucky that they have curled north, northwest, and then north by northeast and died out at sea.

Yesterday’s gains took about half of the bite out of Monday’s losses and restored some of the technical luster to the market. On the nearby daily continuation chart on the next page, prices found support at the lower line of the high/low moving average oscillator, which gives the emerging trend higher a chance. The weekly charts still show a weaker market that is oversold, but is in support. Prices look poised to change the longer-term trend, with a strong week over the next few days.

 Technical Recap

 NG Options Report

Premium Subscribers (click here to register):

Volumes & Open Interest

End Of Day Straddles

Trade Blotter

Settlements