The declines, narrowing the premium left after Nov expiration, was expected but did not see $3.15 as support that would reverse prices $.17 higher. Clearly, some shorts looking for supportive news from the storage release got caught. Is this the only test of the premium low? Not sure, but we know from the Nov contract, where prices declined for the first four days of Nov being prompt, the gap from the premium never closed. In the Nov contract prices declined 15% and yesterday’s declines are only a 5% decline. Major issue for the bulls is the high for December gas is only a nickel away. Must make this call– as my Weekly discussed, two weeks ago, that gap area around $3.05 has now defined itself as major support for the near term. The fact that yesterday’s decline never tried to test that area does little to alter this view.
Major Support: $3.19, $3.101-$3.091, $3.047, $2.907, $2.822 Minor Support:$3.151, $2.98, $2.84 Major Resistance: $3.318, $3.361-$3.370, $3.423, $3.516
