MARKET COMMENTARY | For Week Ending 10/13
Natural gas rebounds after sliding to a two-month low.
Natural gas moved 3.0 cents lower to $2.833 per MMBtu as weather forecasts continued to call for mild fall temperatures to stretch into the last week of October. Crude oil ended the session marginally higher after the previous Friday’s 3% drop that was brought on by refinery shut-ins from Hurricane Nate. The November WTI contract settled 29 cents higher at $49.58 per barrel. Equity markets fluctuated between positive and negative territory during the day’s relatively quiet session after gains in energy shares failed to offset losses elsewhere.
Natural gas bounced off technical support levels after falling to its lowest level since mid-August during the prior day’s session. The November NYMEX contract climbed 5.8 cents higher to $2.891. Crude oil jumped $1.34 to $50.92 after Saudi Arabia’s oil minister said the country would scale back sea exports by 7% in November in an effort to reduce the global supply glut. Equities moved back into record territory with support from rising energy shares and as investors prepared for the start of Q3 corporate earnings season.
Natural gas edged 0.2 cents lower to $2.889 as traders covered short positions and looked ahead to the following day’s storage report, which was expected to show a build in the mid-70s to low-80s. Similarly, crude oil advanced 38 cents to $51.30 as traders prepared for the following day’s Petroleum Status report. Stocks managed to climb higher as investors waited for third-quarter corporate earnings season to ramp up.
Natural gas closed 10.0 cents higher at $2.989 even after the EIA reported a higher-than-expected 87 Bcf injection into storage, which brought total working supplies in storage to 3,595 Bcf. Crude traders took the opportunity to lock in profits after the EIA revealed a 2.7 Million barrel decline in domestic oil inventories. The cost of oil retreated 70 cents to $50.60. Equities lost ground late in the session as investors digested third-quarter corporate earnings reports from several financial and tech companies.
Natural gas looked to test upside technical resistance levels even though the weather forecast remained bearish through the end of October. The front-month contract settled 1.1 cents higher to end the week at $3.000. Oil gained 85 cents to $51.45 after Chinese oil imports rose by 1 million barrels per day to 9 Mb per day, the highest import level since May. Equity markets recovered losses from the prior session following the release of better-than-expected retail sales data for the month of September.
Natural gas traders will continue to closely monitor the weather forecast for signs of cooler temperatures.