

Nat gas prices traded lower on Wednesday as the market turned its focus to signs of increasing supply in the East. The FERC approved the startup of the Mountain Valley Pipeline, allowing producers in the Appalachia to slowly boost output. Additionally, EQT confirmed that it has started to bring back online 1 BCF/day of curtailed output. July futures settled 8.4 cents lower at $3.045.

While supplies started injection season at higher than normal levels, injections thus far are running 12% lower than the 5 yr avg. End of season storage estimates were cut by the EIA to 3.971 TCF, which is about 6% below the 5 yr avg.
Today’s report covering the week ended June 7 is expected to show a build of 74 BCF. This would fall short of last year’s 90 BCF build and the 5 yr avg build of 89 BCF. Early estimates for the week ending June 14 suggest a build of 69 BCF, once again falling below historical comparisons.
Weather related demand has helped push overall nat gas consumption so far this month to an average of 95.9 BCF/day, 2.3 BCF/day higher than Jun’23. Month to date, power burn is averaging 38.1 BCF/day, up 0.6 BCF/day from June 2023. With intense heat on the horizon for the eastern US, power burn is expected to increase to an average of 41.3 BCF/day over the next 7 days before rising to an average of 42.3 BCF/day during the 8-14 day period.

LNG exports are expected to trend higher as Sabine Pass is expected to wrap up maintenance. The decline in exports there have been offset by a rebound in exports out of Freeport which are averaging about 1.9 BCF/day so far this month, up 0.25 BCF/day from May.
Gas prices continue to pull back this morning as higher output levels are competing against hot weather forecasts and an expected narrowing of the surplus.

A near term top may be in place in the natural gas market following a sell off on Wednesday which dropped the spot July 24 contract lower by .084 as it closed the day at 3.045.
A potentially bearish inside range day was also posted on another heavy volume session of 224,795 contracts.
Tuesday’s high was technically important as it came at the previous high for the July 24 contract (double top?) and at the final 88% retracement of the 2024 downtrend at 3.165 on the daily continuation chart.
Key support today is a former 7-month trend line broken as resistance two weeks ago. This former resistance now support at 2.850-2.860 coincides with the 10 day moving average on the daily continuation chart and a trendline beginning at the early-May low on the 60-minute chart.
If 2.850-2.860 support is broken, the near term trend will turn back down with the 200 day moving average at 2.465 becoming the next area of support.
3.150-3.165 is primary resistance. A breakout above this resistance will turn the January 2024 high at 3.390 into the next area of resistance.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -63.35






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