Morning Futures Roundup
Warm Weather Cools Natural Gas
Fundamentals
Natural Gas futures have been trading sideways for the past week and a half, after falling back from 4-month highs made earlier this month. Many traders are now looking past the cold December and have focused on the New Year, which is expected to bring higher than average temperatures.
Inventory levels are expected to drop once again this week to 3.368 trillion cubic feet, almost 500 billion cubic feet off record highs made in the first week of November. Some traders may disregard this data in light of the warmer weather and record Natural Gas production. Unlike Crude Oil, Natural Gas does not enjoy the inverse relationship with the US Dollar, so outside markets will probably not help support prices.
Commodity funds have also soured on Natural Gas, reducing their net long position by 35%. Colder than expected weather could change the market outlook, but it does not appear that will happen, at least according to forecasts.
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About Mike Zarembski
Born in the grain pits of the Mid-America Commodity Exchange (MidAm) in the early 1990s, Mike's futures career soon shifted to the offices of TD Waterhouse in 1999, followed by Xpresstrade in 2002 and eventually optionsXpress in 2007.
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