

Spot month gas prices extended their losing streak yesterday, settling lower for a 3rd straight session as the market looked past the current heat wave. Abundant storage levels helped offset stronger cooling needs, while forecasts for more moderate temps ahead tempered demand expectations. A tentative peace deal in the Middle East added further downward pressure. Tomorrow’s expiring July contract settled 15.1 cents lower at $3.537.

A record setting injection season this year has helped cushion the impact of extreme heat across the East, easing supply/demand concerns. This week’s storage report is expected to further widen the 5yr avg surplus and cut the year over year deficit. Estimates call for a build of 86 BCF for the week ended June 20, which compares to last year’s build of 57 BCF and the 5 yr avg of 79 BCF. Expectations for the week in progress are substantially lower as unseasonably hot conditions led to a spike in power burn.
Production is holding up with the 7 day average at 105 BCF/day which includes today’s estimate of 104.6 BCF/day. Platts estimates output will average 104.7 BCF/day over the next 2 weeks.
LNG feedgas demand is back above 15 BCF/day as Sabine Pass returns back to fully capacity.

The spot month contract is down another 5 cents this morning as the intense heat over the East will begin to ease up after today. Near term forecasts are showing less heat across the central and eastern US for the start of July.
Technical Analysis

Tomorrow’s expiring July 25 natural gas contract was well sold for a 2nd day on Tuesday dropping under 10 day moving average support in early trade.
By session’s close, the July contract had lost .161 (4.3%) to settle at 3.537.
The July contract is down .611 (14.7%) from last Friday’s high and is down again in today’s trade.
The July contract has broken out under daily continuation chart 40 day moving average support at 3.545 in today’s early trade.
This turns the 3.453 low set two weeks ago into the next area of support followed by the 200 day moving average at 3.365.
The 40 day moving average broken as support is now near term resistance at 3.545 followed by the 10 day moving average currently at 3.675.
Trend following indicators are turning bearish with the recent breakout below 10 and 40 day moving average support this week. The short term trend following index is also bearish.
Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 46.37






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