

Spot month gas prices soared Monday amid rising demand expectations, lower production and increased LNG gas flows. Further support stemmed from a jump in EU gas prices following an outage affecting Norway’s gas exports to Britain. The outage drove US prices higher on concern it could tighten supplies as a heatwave in Asia is already causing increased competition for LNG. July futures settled 16.9 cents higher at $2.756.

Lower production levels over the weekend helped ease supply concerns, aiding yesterday’s rally. Production is showing a steep day over day decline this morning, coming in 1.6 BCF/day lower at 98.3 BCF/day. The decline is being driven by the Texas and NE regions.
LNG feedgas flows came in at 13 BCF/day Monday. Volumes to Freeport LNG returned to about 80% of capacity following a trip of Train 2 last Thursday that briefly halted production. LNG exports are expected to slow as terminal maintenance picks up this month. Sabine Pass LNG was scheduled to kick off maintenance yesterday with work not expected to be completed until June 16.

Forecasts underwent minor changes overnight in terms of CDDs. Strong demand is expected over the coming few days as temps remain near to warmer than normal over much of the US. Strong heat will continue across Texas with highs there in the 90’s too 100’s. Demand is likely to decline later this week heading into next as cooler temps track across the East.
Prices are currently trading lower as the outage in Norway is expected to be limited, which is easing supply concerns.

A strong rally occurred in the natural gas market on Monday as the spot July 24 contract broke out above 10 day moving average resistance in early trade.
By session’s close, the contract had gained .169 (6.5%) settling the day at 2.756.
Daily volume came in at 233,642 contracts, a 3 ½ month high.
The 2.924 high set two weeks ago is the next area of resistance followed by 2.975 (78% retracement resistance of 2024 downtrend) and 3.165 (88% retracement).
10 day moving average support is at 2.645 today followed by the 200 day average at 2.450. The 200 day moving average held as support in last week’s trade.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index -63.61






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