

Despite ample storage and strong production levels, spot month gas prices settled higher Friday, supported by elevated demand expectations. Hotter than normal conditions helped boost power burn estimates for the coming week while rising LNG feedgas flows added to the bullish sentiment. Afternoon data showing a healthy increase in gas drilling activity helped the market pare back some of the day’s gains by the close. Aug futures settled 2.3 cents higher at $3.565. For the week, prices the spot month contract gained 8%.

In line with what is typically the hottest time of year, Friday’s forecast showed readings across much of the US climbing to some of their highest levels of the summer. As of Friday, the 15 day outlook projected a total of 193.7 CDDs, ranking 10th hottest for the period.
The hotter conditions have resulted in stronger demand expectations for gas fired electric generation. Platts estimates power burn will rise to an average of 47.2 BCF/day over the next week, increasing to an 51.3 BCF/day during the 8-14 day period. Power burn is estimated this morning at 45.4 BCF/day.
Marking the biggest weekly increase since July 2023, the nat gas rig count rose by 9 rigs last week to a total of 117. This is up 14 rigs from a year ago and is the highest rig count since March 2024. Increased drilling activity will lead to more supply in the coming months.
Production levels picked up over the weekend, reaching 106.9 BCF/day with gains seen across several regions. Output is coming in this morning at 106.3 BCF/day. Month to date, production is averaging 106 BCF/day.

Gas prices are starting the week lower as near term forecasts turned less hot for the NE with US and EU weather models trimming CDD expectations. Signs of increased output are also weighing on the market.
Technical Analysis

In last week’s trade, the spot August 25 contract rallied higher from lower-3.200 support reaching a 3.629 high on Wednesday before closing at 3.565 on Friday.
For the week, the August contract was up .351 or 10.9%.
The August contract gapped lower by .101 from Friday’s close and is currently trading under daily continuation chart 10, 40 and 200 day moving average support.
If the breakout holds, the 3.149 low set two weeks ago will become the next downside objective.
The top of the overnight gap at 3.495 is near term resistance followed by last week’s 3.629 high.
Trend following indicators are turning more bearish and momentum appears to be turning down even with last week’s rally higher.
Moving Average Alignment – Neutral
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index 47.33






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