By: Heather Wine, Senior Risk Manager - Energy
Following Tuesday’s nearly 23 cent rally, spot month gas prices edged lower yesterday as milder weather returned to much of the country following the recent cold snap. The warming trend reduced heating demand by about 6.5 BCF/ day, while production continued to hold near record highs. Dec NG settled 3.2 cents lower at $4.533.
Forecasts for the balance of November feature warmer conditions across the central and southern US with colder readings in the NE. The next 20 days will yield 513 HDDs, warmer than the 10 and 30 yr norms and the 12th warmest on record. The latest Weather Desk outlook for December remains unchanged with above normal temps favored across the South into the eastern Midwest and Mid Atlantic regions. The outlook calls for 805 HDDs which falls between the 10 and 30 yr norms and is higher than Dec 2024’s total of 771.9 HDDs.
Storage data for the week ended Nov 7 will be released tomorrow with a build of 33 BCF expected. The estimate falls short of both last year’s 45 BCF build and the 5 yr avg build of 35 BCF. If correct, stocks would rise to 3.948 TCF. Injection season will wind down after tomorrow’s report.
Expectations for the week in progress call for the season’s first net withdrawal, near 16 BCF, followed by another small injection for the 3rd week of November.
LNG exports continue to set new highs, averaging 18.2 BCF/day over the past week. Feedgas demand is expected to remain elevated, averaging roughly 18.3 BCF/day over the next 2 weeks.
The EIA’s latest STEO projects Q4 exports to average 3% higher than last month’s forecast, reflecting a faster than expected ramp up at Plaquemines. For 2026, the EIA anticipates a 10% year over year increase in exports as Golden Pass and Corpus Christi Stage 3 bring an additional 2.1 BCF/day of export capacity online.
Source: NOAAThe spot month is currently trading 8 cents higher on the day.
The December 25 natural gas contract lost .032 on Wednesday holding under Tuesday’s 4.582 high as resistance to close the day at 4.533.
A bearish inside range day was posted on Wednesday but will need to see follow through selling for confirmation. An inside range day was set two sessions ago but failed to hold.
The daily continuation chart 10 day moving average is at 4.360 today and is primary support. If broken, it could set off a wave of selling.
The daily continuation chart daily RSI has held above the 70 level considered “overbought” for 10 consecutive sessions.
Tuesday’s 4.582 high is near term resistance. If broken, 4.640-4.675 will become the next area of resistance. Longer term resistance is the March 2025 winter high at 4.900.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 74.13 (in overbought area)
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