Yesterday was a bad day for anyone long the December natural gas contract, which closed down 4.3% at 4.467, the lowest close for the December ’09 contract ever (i.e. since 2003). The bulls didn’t stand a chance as prices dropped past 4.543 inflection point to crater at 4.436, just 2.1 cents above our 4.415 intra-day.
As far as today goes on the NYMEX, offers through yesterday’s 4.436 low print alerts to follow through momentum towards our 4.343 inflection-point and the September 04th (pre-winter rally) 4.340 low print. Below here we will look for offers towards our 4.219 intra-day. On the other hand, a rebound through yesterday’s 4.551 pivot-high clears a path towards our 4.591 inflection point. We will look for further strength above here towards our 4.715 intra-day.
Key takeaways from yesterday’s EIA Short Term Energy Outlook (STEO):
Crude oil prices gave up a tiny bit of Monday’s 2.6% gain yesterday, falling 0.4% or 38 cents to close at 79.05. The contract started the day moving higher, crossing our 79.84 alert but stalling at 80.51, well below our 81.14 inflection point. Prices reversed shortly after to bottom out at 78, safely above our 78.55 pivot low. Since prices didn’t close above the 79.84 point mentioned yesterday, The Schork Report maintains our bearish daily bias.
Stephen Schork is the Editor of, and has more than 17 years experience in physical commodity and derivatives trading, risk systems modeling and structured commodity finance.