

With an early session rally failing to hold, July nat gas closed down modestly yesterday driven by above normal injection forecasts. Bearish sentiment was tempered somewhat by forecasts showing hotter weather arriving later this month while production levels remained steady. The July contract settled down 2.6 cents at $3.507.

Production has trended lower this week since hitting more than 106 BCF/day on Monday. We should see a further recovery as pipeline maintenance winds down. Dry natural gas production is averaging 105 BCF/day so far this month. The EIA is forecasting dry output to average 106 BCF/day this year, up about 3 BCF/day from 2024.
Continuing the streak of triple digit builds, today’s storage report is projected to show stocks increased by 108 BCF during the week ended June 6. This compares to last year’s build of 77 BCF and the 5 yr avg build of 87 BCF. If correct, stocks would rise to 2.706 TCF, expanding the 5 yr avg surplus to 143 BCF. Early estimates for next week’s report covering the week ending June 13 range from a build of 83 to 111 BCF with an average increase of 102 BCF. This would once again outpace both last year and the 5 yr avg builds of 72 BCF each.

Prices are trading higher this morning as near term forecasts turn more supportive with expanding coverage of above normal temps during the 6-10 day period.
LNG feedgas demand is also strengthening, estimated this morning at 15 BCF/day, up 0.5 BCF/day. The rebound is being aided by a recovery at the Cameron LNG terminal as maintenance wraps up.
Technical Analysis

The July 25 natural gas contract closed down for a 3rd consecutive session on Wednesday settling the day at 3.507, down .026.
The gap created last Monday at 3.450 was closed on Wednesday with prices rebounding in today’s early trade.
The 10 day moving average which held as resistance on Wednesday is being tested again in today’s early trade at 3.630 with a current 3.644 overnight high.
If 10 day moving average resistance is broken, it should bring in both short-covering and new technical buying turning last Friday’s 3.817 high into the next upside resistance.
If 10 day moving average resistance holds, Wednesday’s 3.453 low extending down to the 40 day moving average at 3.420 will remain primary resistance.
A breakout under 3.420 will turn the 200 day moving average at 3.300 into the next area of support followed by 3.200 which is the bottom of the gap on the 60-minute chart created during expiration of the June 25 contract. As long as this gap remains open, it will be a bearish technical signal.
Trend following indicators remain bullish but 10, 40 and 200 day moving average alignment has turned neutral-bullish with 10 day moving average support broken this week.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 52.09






This material should be construed as the solicitation of an account, order, and/or services provided by the FCM Division of StoneX Financial Inc. (“SFI”) (NFA ID: 0476094) or StoneX Markets LLC (“SXM”) (NFA ID: 0449652) and represents the opinions and viewpoints of the author. It does not constitute an individualized recommendation or take into account the particular trading objectives, financial situations, or needs of individual customers. Additionally, this material should not be construed as research material. The trading of derivatives such as futures, options, and over-the-counter (OTC) products or “swaps” may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand the risks prior to trading. Past results are not necessarily indicative of future results.
All references to and discussion of OTC products or swaps are made solely on behalf of SXM. All references to futures and options on futures trading are made solely on behalf of SFI. SXM products are intended to be traded only by individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM.
SFI and SXM are not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Contact designated personnel from SFI or SXM for specific trading advice to meet your trading preferences.
(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.
Reproduction or use in any format without authorization is forbidden. © Copyright 2024. All rights reserved.




