The winter drawdown has begun but it has so far failed to lift the price of natural gas decisively. The bulls have cleared the key range resistance around $3.14 area twice since September but ultimately failed to push price higher in a sustainable manner. According to our calculations at FxWirePro, natural gas is currently trapped in a fight between the bulls and the bears. Until one group gets over the other, the price is likely to remain trapped in a range of 40-45 cents per MMBtu.
Our calculations suggest that while bulls are looking to push price towards $3.45 area ahead of key drawdown season, bears are looking to push price towards $2.7 support as the winter is expected to be warm due to El Nino effect. As of now, the bears are stronger as the price failed to break higher after the break of key resistance zone around $3.14 in early November. However, the bulls are expected to reemerge with gathered strength once the price gets around $2.95 area.