

The spot month contract settled higher ahead of the weekend following a volatile trading week amid fluctuating weather models. Friday’s uptick was mostly technical related with traders covering short positions prior to the weekend. Some spillover support may have stemmed from overseas prices which traded at 11 month highs as European storage levels have begun to drawdown. Dec NG ended 3.8 cents higher to settle at $2.823.

Production remains a major influencing factor on the market as levels have fluctuated in response to price direction. While output has seen big swings this month, there has been a steady rebound over the past several days as the cash market recovers. Output over the weekend, averaged 102.7 BCF/day and is estimated this morning at 102.5 BCF/day. This is about 4 BCF/day higher than where it bottomed out last week.
LNG flows hit an 11 month high late last week of 14.3 BCF/day. Feedgas demand has remained strong, coming in this morning at 13.8 BCF/day. Month to date, LNG feedgas is averaging 13.3 BCF/day, down from last year’s 14.2 BCF/day.

According to Maxar, colder temps will push south into the Plains and Midwest late Nov into early Dec. The NWS still showing less cold than Maxar for the 8-14 day period. Tropical Storm is no longer a threat as it fizzled out over the weekend.
Prices are currently trading higher as demand levels are expected to pick up over the next 2 weeks.

The spot December 24 natural gas contract spent much of last week’s trade pushing up against 10-month trend line resistance at the lower-3.000 level.
With resistance holding, the December contract sold off in Thursday’s session bottoming Friday on 40 day moving average support.
After closing Friday at 2.823, up .154 (5.8%) for the week, the December contract again tested lower-3.000 resistance topping out at a 2.974 overnight high.
Whether or not the December contract can close above lower-3.000 resistance will be a key technical test for the market this week.
If resistance is broken, the June 3.159 high will become the next upside objective.
But if resistance holds, the primary trend will remain sideways to down.
10 day moving average support is at 2.810 today followed by the 40 day moving average at 2.660.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 57.81






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