

Nat gas continued to rally Wednesday in anticipation of a narrowing surplus with a second straight triple digit withdrawal expected today. While forecasts call for a warmer than normal end to the month, the market is more concerned over the possibility of a colder pattern setting up for early to mid-January. Jan futures settled up 6.6 cents to settle at $3.374.

Following last week’s massive pull of 190 BCF, the EIA is expected to report another larger than normal withdrawal of 126 BCF for the week ended Dec 13. This compares to last year’s pull of 92 BCF and the 5 yr avg draw of 78 BCF. If correct, stocks would total 3.621 TCF, leaving the year over year surplus at 0.5%.
Expectations for upcoming storage reports suggest we could see stocks completely wipe out the year over year surplus by the end of 2024. For the week in progress, stocks are estimated to fall 97 BCF, which is 10 BCF higher than last year's draw.
December has featured a variable weather pattern that will continue through the rest of the month. Colder conditions are expected across the Midwest and East this weekend into Monday, followed by an unseasonably warm pattern across the entire US to close out the year. A total of 770 HDDs is forecast for the month, which is in line with the 10 yr norm.
For January, Maxar is still predicting widespread above normal temps across the East and below normal readings across the West. A lower than normal 890 HDDs are expected for the month.

Heating demand expectations are reflecting the change in weather with res/comm usage for the next 7 days expected to average 41.6 BCF/day while the 11-15 day period will see heating demand average 34.4 BCF/day.
Nat gas continues to move higher this morning on expectations for a narrowing surplus that could be wiped out by the end of the year.

Continued strength in the natural gas market on Wednesday as the spot January 25 contract tacked on another .066 (2.%) to close the day at 3.374.
Overnight buying has rallied the January contract over the 3.500 area as it challenges double top resistance at 3.559-3.563.
A breakout above 3.563 will negate the possible double top reversal turning the November 2023 high at 3.630 into the next area of resistance.
10 day moving average support is at 3.290 today followed by weekly low support at 3.091.
Primary support remains the 2.950-3.000 area which is former trend line resistance as well as the 40 day moving average currently at 3.005.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 61.46






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