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Daily Natural Gas Market Update 5-22-26

By: Heather Wine, Senior Risk Manager - Energy

StoneX Value Matrix

image-20260522072323-2

Source: StoneX Value Matrix (2), Bloomberg

Fundamentals & Weather

Nat gas posted modest gains Thursday with the spot month trading lower immediately following storage data only to rebound later in the session. June futures settled 1.4 cents higher at $3.018.

The 6-10 day outlook has turned cooler for the West Coast and southern US, with normal to below normal readings expected. Temps across the Midwest however are still expected to average warmer than normal. The 11-15 day  period also features a cooler shift along parts of the East Coast, SE and South Central US. CDDs over the next 15 days are estimated at 77.3 CDDs, below both the 10 and 30 yr norms but warmer versus last year. 

The NOAA is predicting a below normal hurricane season this year, given the strengthening El Nino. They are calling for 10 named storms, 5 hurricanes and 2 major hurricanes.  

Source: NOAA

Exceeding expectations by 6 BCF, yesterday’s EIA report showed a 101 BCF injection for the week ending May 15, lifting inventories to 2.391 TCF. Supplies are now 33 BCF above last year and 149 BCF above the 5 yr avg.  The build marks the 2nd largest of the season thus far.  

Estimates for the current week are centered around a 90 BCF build as a brief surge in temps limited injections.  This compares to the 5 yr avg build of 97 BCF and last year’s build of 104 BCF. 

image 131716Source: StoneX

Weather demand is expected to remain moderate through the weekend with power burn expected to drop more than 1 BCF/d from today’s estimate of 32.8 BCF/d.  Res/comm demand is also expected to moderate from today’s level of 13.6 BCF/d.  Heating needs will decline to 10.8 BCF/d over the next week and to 9.2 BCF/d during the 8-14 day period. 

LNG feedgas demand remains supportive at 17.3 BCF/d. 

image 131717
Source: StoneX

image-20260522072259-1

Source: Bloomberg, CME

The June 26 natural gas contract closed flat on Thursday holding above 2.980-3.000 support but failing to extend early morning gains.

After closing Thursday’s session at 3.018, up .0145, the June contract is currently weaker in today’s session testing both 2.980-3.000 support as well as the 10-day moving average at 2.960.

If support holds as expected, 3.133 is weekly high resistance followed by 3.250-3.270.  Longer-term resistance is the 200-day moving average at 3.425.

If 10-day moving average support at 2.960 fails to hold, the 40-day average at 2.785 will become the next area of support.

Even if prices weaken near term, the longer-term trend remains sideways to higher.

Technical Indicators:  Moving Average Alignment – Neutral-Bullish

Moving Average Alignment - Bullish

Long Term Trend Following Index – Bullish

Short Term Trend Follow Index - 57.01

image 131701

Source: Bloomberg, CME

image 131700

Source: Bloomberg, CME

image 131699

Source: Bloomberg, CME

image 131134

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

image 131133

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

Forward Curve Pricing

image 131698

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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