Published Thursday afternoon, 10/18/12

Natural Gas traded higher settling $3.587 up $0.117 3.4%, unchanged now WoW. The curve was much firmer, X12/F13 $0.045 tighter, F/J $0.025 tighter, 14/16 $0.025 better. Hub cash was a bit stronger, ~$0.18 back this morning, Z-6 up $0.08 to $3.50. The 12z was cooler Southern and Eastern U.S. during the 6-10 day and warmer West. The 11-15 day was cooler Northern Plains, Midwest, Northeast and warmer Texas/Southeast. The EIA reported an injection of 51 Bcf, slightly bearish vs market expectations ~47 Bcf. Inventories now 3.776 Tcf, the YoY and 5-yr surplus both tighten to 152 Bcf and 260 Bcf respectively. Next week we anticipate an injection ~65 Bcf, lower than 2011’s 92 Bcf and in line w/ the 5- yr average 68 Bcf injection.

Vol was firmer overall today: (X12 360 15.50 17.00 36.03% -0.74% Z12 390 35.00 36.50 35.64% 0.29% F13 405 47.50

49.00 34.15% 0.28% G13 405 57.00 59.00 33.86% 0.20% H13 400 63.00 65.00 33.59% 0.50% J13 395 65.00 67.00

31.89% 0.42% K13 395 69.00 71.00 30.97% 0.36% M13 400 74.00 76.00 30.27% 0.30% N13 405 78.50 80.50 29.90%

0.26% Q13 405 83.50 85.50 30.01% 0.22% U13 405 89.50 91.50 30.49% 0.18% V13 410 96.00 98.00 30.92% 0.15%).

Technically today’s really turns us neutral, above $3.64 we target $3.75.. Resistance is found at $3.64, $3.75. On the downside we see support at $3.40, $3.32, $3.23, $3.16, $3.07, $2.95.

Editor’s Note: Natural Gas Commentary readers who are equity investors/traders only can gain access to the Natural Gas space through the following exchange traded funds (ETFs).

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United States 12 Month Natural Gas Fund (UNL, quote)

First Trust ISE-Revere Natural Gas Index Fund (FCG, quote)

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