

Spot month gas prices rose further on Tuesday, hitting a 14 month high while marking the 4th straight day of gains. Increased feedgas demand at Freeport has helped drive the market higher recently while output levels fell nearly 2 BCF/day yesterday. June futures settled 1.2 cents higher at $2.207.

The impact from cutbacks in drilling activity and delayed well completions are becoming more evident. Production levels saw a steep decline yesterday, falling to 98 BCF/day from the previous day’s 99.7 BCF/day.
The EIA’s latest STEO shows nat gas production declining this year to 102.99 BCF/day amid reduced drilling activities. They project output will rise in 2025 to 104.79 BCF/day.
A slightly larger than normal injection is expected for the week ended May 3, providing no respite for the massive oversupply. Platts is calling for a build of 84 BCF while Refinitiv is estimating a build of 89 BCF. The estimates compare to last year’s build of 71 BCF and the 5 yr avg build of 81 BCF. Demand levels last week fell by 6.3 BCF/day as an 8.9 BCF/day drop in res/comm usage was partly offset by a 3.1 BCF/day increased gas fired power demand. Supply levels for the week were near flat.
Early estimates for the week in progress suggest a build of 71 BCF which would fall below last year’s build of 93 BCF and the 5 yr avg build of 90 BCF.

Early morning gains appear to be drying up as estimates show LNG feedgas has fallen back down to 11.6 BCF today, down 0.9 BCF/day from Tuesday. Dry output has also inched higher this morning by 0.2 BCF/day to 98.2 BCF/day.

The June 24 natural gas contract closed nearly unchanged on Tuesday settling at 2.207, but is up over .060 in today’s early trade.
Weekly high resistance at 2.262 has been broken overnight turning the 2.311 January low into the next area of resistance.
If 2.310 resistance is broken, the top of an open gap at 2.410 created in late-January will become the next upside objective followed closely by the 200 day moving average at 2.460.
60 minute chart oscillators are showing bearish divergences and the last two daily bars have been Doji cross Japanese candlesticks (open and close at the same level) which appear near the end of a trend.
2.090-2.100 is near term support followed by the 10 day moving average at 2.005. Longer term support is the June 24 contract low at 1.900.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -69.07






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