

Rising production and high storage levels applied downward pressure to the gas market on Friday while continuing to offset heat driven demand. Storage levels remain 19% above normal despite 7 straight weeks of below average injections. Forecasts for extreme heat across the South were offset by the probability for more moderate temps across the northern US. Aug futures settled Friday’s session 8.4 cents lower at $2.601. For the week, prices fell about 4%.

Baker Hughes reported Friday that gas drilling rigs fell by 1 last week to a total of 97 rigs, the lowest since 2021.
Output strengthened on Friday to 102 BCF/day and remained strong over the weekend. Early estimates for today however show output down 0.8 BCF at 101.3 BCF/day. Output is likely to continue displaying some variability until maintenance concludes.
According to Maxar, June 2024 was the hottest on record per CDDs, yielding a total of 304.9 CDDs versus the previous record of 292.5 back in 2021. The next 15 days are expected to see a total of 203.8 CDDs which comes very close to the 2012 record of 202.5 CDDs. Weekend forecasts showed some cooler changes in the Central US, resulting in a loss of 6.7 CDDs from Friday’s outlook.

Tropical activity is picking up with the 3rd named storm forming today. Hurricane Beryl is expected to impact the Windward Islands today as a Category 4 hurricane, the earliest in the season on record to reach this strength. Beryl will track toward the Yucatan later in the week. A track toward Texas this weekend or next week is not being ruled out. Tropical Storm Chris made landfall this morning in northern Mexico has been since been downgraded to a depression.
Prices continue to drop this morning as the market factors in weather patterns, elevated storage levels and production.

The spot natural gas contract, currently August 24, has closed down three consecutive weeks as the market corrects following a 7-week rally higher.
The August contract closed Friday’s session at 2.601 and is down in today’s early trade as it tests a key area of support.
This support at the lower-2.500 area is a trend line on the August 24 chart beginning at the mid-February low. It is also the 38% retracement of the 2024 uptrend on the daily continuation chart at 2.520.
If lower-2.500 support holds, the trend could swing back higher with the 40 day moving average currently at 2.630 being the 1st area of resistance.
If lower-2.500 support is broken, the 200 day moving average on the daily continuation chart at 2.465 will become the next area of support followed by the 50% retracement at 2.320.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index -44.78






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