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Daily Natural Gas Market Update 2-6-26

By: Heather Wine, Senior Risk Manager - Energy

StoneX Value Matrix

image-20260206070738-1

Source: StoneX Value Matrix (2), Bloomberg

Fundamentals & Weather

Nat gas prices settled higher Thursday following a choppy session that initially pushed prices lower in response to storage data that came in below expectations, despite setting an all time record. Rising LNG flows provided support into the afternoon, reflecting robust export demand. Forecasts showing extreme cold for the NE over the next few days also boosted heating demand expectations.  The March contract settled 4.4 cents higher at $3.509.  

Forecasts continue calling for a warmer than normal pattern across the eastern US during the 6-10 day period, with temps averaging at least 10 degrees above normal.  The eastern 2/3 of the country will remain on the warmer side of normal through Feb 19.

Source: NOAA

The withdrawal for the last week of January totaled 360 BCF, eclipsing the all time record pull by 1 BCF.  The record breaking draw reflected extreme cold during late January that caused both heating demand and power generation to spike. While the draw did fall short of estimates by 14 BCF, it significantly exceeded historical estimates, flipping the 5 yr avg surplus into a 27 BCF deficit.  At a total of 2.463 TCF, stocks maintain a year over year surplus of 41 BCF. 

Another hefty draw is expected for the week in progress with estimates calling for a draw of 249 BCF, well above both last year’s pull of 111 BCF and the 5 yr avg pull of 146 BCF. 

image 126203

Source: StoneX

LNG flows remain supportive, with feedgas demand estimated this morning at 18.8 BCF/d, up 0.1 BCF/d.  Month to date flows are averaging 18.5 BCF/d, up roughly 3.5 BCF/d from last year.  

Strong export demand is helping counter rising  production levels, which currently stand at 107.8 BCF/d.  

image 126204Source: StoneX

image-20260206070825-2

Source: Bloomberg, CME

The March 26 natural gas contract has closed higher three consecutive days following Mondays 26% sell off.

From Monday’s 3.237 close, the March contract has steadily moved back higher settling Thursday at 3.509.

The daily continuation chart 200-day moving average which held as resistance on Thursday is being tested again today at 3.610.

If 200-day moving average resistance is broken, the top of gap created on Monday’s open at 3.820 will become the next upside objective.

3.380-3.400 is near term support followed by weekly low support set on Monday at 3.155.

Moving Average Alignment - Neutral-Bullish

Long Term Trend Following Index – Bullish

Short Term Trend Follow Following Index - Bearish

Relative Strength Index - 45.06

image 126181

Source: Bloomberg, CME

image 126179

Source: Bloomberg, CME

image 126180

Source: Bloomberg, CME

image 125150

Source: Bloomberg, CME, StoneX Value Matrix (2)

image 125149

Source: Bloomberg, CME, StoneX Value Matrix (2)

Forward Curve Pricing

image 126178

Source: Bloomberg, CME

Disclaimer
(1)  The StoneX Commodity Indicator provides an overall view of market sentiment for a commodity based on the quantification of fundamental, technical and historical market data related to that commodity.  The StoneX Commodity Indicator History graphically represents each day’s actual very bearish to very bullish signal.  This history contains the sum of all factors, excluding weather forecasts.
(2) The StoneX Value Matrix provides a measure of historical value by analyzing historical price data distributed into 10 deciles. The prices are adjusted for inflation using the Producer Price Index (PPI) published by the U.S. Bureau of Labor Statistics.
 

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