With winter bearing down on key natural gas markets in the Midwest and East, the Nymex Henry Hub gas contract has never looked weaker.
Yesterday the spot market for January delivery plunged by nearly 5% after the EIA reported a 164 Bcf drawdown in inventory last week. Mind you, there was nothing bullish about the report, i.e. a 164 Bcf draw is on the extreme of the seasonal norm.
What’s more, as detailed in today’s issue of The Schork Report, we are going to see another extreme draw next Thursday as well. Be that as it may, we are now on the doorstep of the winter solstice and gas bulls are scrambling to defend $4.
As we have noted throughout October and November, the historical tendency for Nymex natural gas is to rally and then peak in the fourth quarter.