

Prices rebounded back above $3 yesterday as the May contract went off the board. Much of the move was technical related as fundamentals remain mostly bearish. Production levels are recovering while estimates for the next 3 injections are much higher than historical comparisons. May NG settled at $3.17, up 23.3 cents while the now spot month June contract settled 22.9 cents higher at $3.343.

Mostly bearish weather outlooks suggest light weather demand over the next 2 weeks. Res/comm usage fell 0.6 BCF/day yesterday and is down another 1.5 BCF/day this morning at 14.9 BCF/day. Res/comm demand is expected to fall to an avg of 12.2 BCF/day during the 8-14 day period. LNG feedgas demand is strong at 16.3 BCF/day.
Production levels have trended a touch lower the past few days. Output is currently estimated at 105.3 BCF/day, down 0.5 BCF/day from Monday. Output is not expected to show much improvement over the next 2 weeks with an avg of 105.5 BCF/day anticipated.

The market is trading mixed this morning with prices holding onto most of yesterday's gains. LNG feedgas flows are edging higher while weather driven demand should remain moderate, allowing for large storge builds ahead.
Technical Analysis

The expiration of the May contract today saw a key reversal to the upside as the May future’s contract expired at $3.170 after trading earlier in the day as low at $2.859. The front-month June future’s contract settled at $3.343, up .229 cents.
Today’s price action is a key reversal into what is normally a period of seasonal strength for the next six weeks. Trading back above the 200-day moving average at $3.080 in such a bullish pattern also supports at least an intermediate and possibly a long-term low through mid-summer.
There is little upside resistance until the $3.500 level while supports sits at the 10-day moving average at $3.120 and the 200-day moving average at $3.080.
The Short-Term Trend Following Index is likely going to cross UP sometime this week. With the daily RSI moving below the 30 level (considered technically “oversold”) last week and the vicious reversal back above 40, while not an outright buy signal, is definitely no longer bearish.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index -43.80






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