May was offered through the August 2025 low, to the lowest price traded since November ’24, and into the zone of support mathematically derived from the continuation decline from the February high before recovering to end the week with a gain. While modest, .026…the higher weekly close was the first for the May contract and on a continuation basis since March 10th. The recovery from a lower low to close back above the ’25 annual low had the look of a rejection of prompt gas below $2.60, but rather as probing for a lower price level that was rejected last August. Volume for the week was higher (modestly), and while technically positive (with the rally) comes with a caveat.
The satisfaction of a mathematical objective (test of mid term support), recovery from a lower low to close back above a previous significant low, and the unwinding of “bear spreads” (talked about a couple of weeks ago) are characteristic of the gas market attempting to define a seasonal low (I am just not convinced we won’t see a test of $2.60’s again). Volume over the last three days was significantly less than during Tuesday’s decline to the first daily close below $2.622 (the ’25 annual low)…and even though the prompt managed a close above short – term declining trend line resistance that violation was not accompanied by a volume increase. I would expect a small rally which will likely fail at resistance (numerous places up to and including $3.00), then likely retest the water in the $2.60’s.
