By: Heather Wine, Senior Risk Manager - Energy
Spot month gas prices ended a touch higher Tuesday as a late season cold spell across the Midwest and East boosted heating demand. Forecasts for a warm up later this month, combined with strong output, capped gains while also indicating looser balances ahead. Apr NG rose 1 cent to settle at $3.033.
Record heat is set to continue across the West over the next several days. Temps will remain much to strong above normal in the West during the 6-10 day period while temperature variability continues across the Midwest and East.
The TTF contract surged higher this morning after Iran's South Pars gas field came under attack, lending support to US prices while US production continues to ease. April futures are currently about 2 cents higher on the day.
Natural gas demand tumbled last week as springlike temps and a surge in wind generation cut both heating needs and power burn, paving the way for an early season storage injection. Wind output jumped 39% last week, reducing reliance on gas fired generation. Res/com demand fell 27% to 22 BCF/d while power burn dropped 7% week over week to 29 BCF/d.
Platts is calling for a build of 35 BCF for the week ended Mar 13. If correct, the year ago surplus would widen to 177 BCF while the 5 yr avg deficit would flip to a surplus of 47 BCF.
Source: StoneXProduction levels have dipped this week due to freeze offs in North Dakota. Output has fallen from Friday’s 108.4 BCF/d to 106.3 BCF/d as of today. The pullback should be short lived as warming temps allow pipes and wells to thaw.
Month to date, production is averaging 108.1 BCF/d, up 2.3 BCF/d from last year's 105.8 BCF/d.
Two rally attempts over the past two weeks by the April 26 natural gas contract have both failed.
The first rally attempt on March 9th reached a 3.494 high before stalling. In last week’s trade, the April contract reached a 3.317 high but again couldn’t hold the gains.
In this week’s trade, the April contract fell back under 10-day moving average support on Monday tilting the trend back to the downside.
After closing Tuesday at 3.033, up .010, the April contract is trending under the 3.000 level in today’s early trade.
2.880-2.890 is the next area of support followed by the 2.775, the late-February and current 2026 spot contract low.
If 2.775 support is reached and broken, 2.500 will become the next downside objective.
The 10-day moving average broken as support on Monday is now primary resistance at 3.095.
Moving Average Alignment - Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 44.16
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