

The nat gas market extended losses into a 4th straight session Wednesday as the heat dome begins to breakdown causing demand levels to ease while stocks are expected to post another above normal build. Today’s expiring July contract settled 13.1 cents lower at $3.406.

Today’s storage report is expected to show stocks rose 88 BCF in the week ended Jun 20 which would be larger than last year’s build of 59 BCF and the 5 yr avg build of 79 BCF. If correct, stocks would rise to 2.89 TCF. Early estimates for the week ended Jun 27 suggest a build of 51 BCF which would exceed last year’s addition of 35 BCF and would fall short of the 5 yr avg build of 61 BCF.
Power burn is moderating today as record heat subsides across the East. Cooling demand is coming in 4.2 BCF/day lower this morning at 46.4 BCF/day. Given current weather projections, we should see this slide in power burn continue over the next week before ratcheting higher during the 8-14 day period. Res/comm demand is also lower on the day by 2.4 BCF.

Prices continue to fall this morning as forecasts show heat subsiding further over the next 2 weeks over the eastern half of the country.
LNG feedgas demand has fallen to 14.5 BCF/day today, down 0.6 BCF/day. Fluctuations this week have stemmed from Corpus Christi and Sabine Pass.
Technical Analysis

Today’s expiring July 25 natural gas contract has lost .441 (11.4%) over the past three sessions while breaking under several important areas of support.
Daily continuation chart 10 day moving average support at 3.650 was broken on Tuesday followed by a breakout under 40 day moving average support at 3.545 on Wednesday.
After settling Wednesday’s session at 3.406, the July contract is currently testing 200 day moving average support at 3.370.
If broken, the next support will be an open gap on the 60-minute chart created during expiration of the June 25 contract at 3.200.
There are bullish divergences forming on the 60-minute chart which could indicate upside strength today following release of the weekly storage report.
Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 42.39






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