FxWirePro: natural gas outlook – warming up for winter

This year winter is pretty late and weak in United States, which has push natural gas clearly on back foot this year. Price dropped below $2/mmbtu in October in anticipation of warmer weather and a rally from there was again countered by sellers pushing prices lower to 42.04/mmbtu on Monday.

Since then, natural gas have started showing more resilience. Today price is up sharply from $2.18/mmbtu to $2.32/mmbtu, currently trading at $2.29/mmbtu, probably in anticipation of higher drawdown in today's inventory report.

We at FxWirePro remain committed to our recent upside call - Buy natural gas @2.4/mmbtu and at dips with stop loss around $1.9/mmbtu and target around $3.1/mmbtu. Our argument has been that, though winter is late in coming, it will come same like the summer came when price was rallying around $6/mmbtu.

Even though there are possibilities of lower prices in future there could be shorter term upside.

However, bulls' journey won't be easy to come by and today's inventory remains key for that. Total inventory is at record 4 trillion cubic feet.