Natural gas futures are edging higher early Tuesday as investors continue to react to the recovery in the Carolinas in the aftermath of Hurricane Florence and forecasts for warmer temperatures which should lead to increased demand. The limited price action suggests short-covering is taking place as buyers attempt to absorb the huge discount that was posted ahead of the storm last Thursday and Friday.
November Natural Gas futures are trading $2.858, up $0.044.
Bespoke Weather Services put it this way, “Hurricane Florence demand destruction was not quite as bad as anticipated, and combined with significant short-term heat it was enough to keep physical prices firm.”
Bespoke went on to say, “Yet today’s move seemed to be canceling out the overreaction” to Florence’s potential impacts in Friday’s trading, “and we now struggle to see what the upward catalyst would be to move prices above resistance around $2.85 given production back at record highs.”