

Spot month gas prices eased Tuesday after reaching 15 week highs during Monday’s session. Profit taking and uncertainty over a full rebound in export demand triggered the decline. Flows into Freeport yesterday hit nearly 2 BCF/day however overall LNG deliveries fell to 11.7 BCF/day given ongoing maintenance. June futures settled 3.7 cents lower yesterday at $2.344.

A lower than normal injection is expected for the week ended May 10 given a tightening in the supply/demand balance. Platts is calling for a build of 76 BCF while Refinitiv projects a build of 80 BCF. In either case, we will see a further narrowing of the surplus when compared to last year’s build of 93 BCF and the 5 yr vg build of 90 BCF. Res/comm usage last week rose by 500 MMCf/day while LNG feedgas demand rose 200 MMcf/day. This coincided with a 200 MMcf/day decline in output.
Output has fallen 1.5 BCF/day over the past 2 days, coming in this morning at 98.4 BCF/day, according to Platts. The decline comes as producers continue to slow drilling activity with output in the Haynesville taking a big hit. New wells drilled there last month fell to 36, the lowest since late 2020 while well completions dropped to 29, the fewest since early 2021. The EIA says production in the Haynesville will face resistance through summer.

Nat gas is trading higher this morning given the drop in output while forecasts show heat building in the South, causing a boost in cooling demand.

The June 24 natural gas contract closed .037 lower on Tuesday settling at 2.344 but is up in today’s early trade testing two key areas of resistance.
The top of the open gap created in late-January on the daily continuation chart at 2.410 is near term resistance followed closely by the 200 day moving average at 2.455.
There is a good level one of these resistance areas will hold to be followed by renewed downside selling.
Bearish divergences have been forming on the 60-minute chart and may be a warning the current rally may be nearing a downside correction.
Primary support is the 10 day moving average at 2.240 today with longer term support at 2.090-2.100 followed by the 40 day moving average at 1.885 today.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -69.31






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