

After 5 straight winning sessions, the natural gas market settled lower Tuesday on profit taking and lower feedgas volumes. While this month's decline in output has been a supportive factor, production levels have entered a neutral territory around 101.7 BCF/day. Sep futures settled 4.1 cents lower yesterday at $2.148.

Storage levels remain at a 15% surplus as we move into the final stretch of summer. This is likely to narrow however as of Aug 9. Tomorrow’s report is projected to show a single digit build given recent production declines and strong cooling demand. Platts is calling for an injection of 3 BCF for the week ended Aug 9. Estimates range anywhere from a draw of 11 BCF to a build of 20 BCF. The number will compare to last year’s build of 33 BCF and the 5 yr avg build of 43 BCF.
Maintenance projects have reduced feedgas demand for LNG exports over the past week. Volumes were estimated yesterday at 12.4 BCF/day, down from this week’s high of 13.2 BCF/day. Today’s feedgas estimate from Platts shows demand at 12.5 BCF/day.

Prices are moving back higher this morning with the market focused on a return to hotter temps later this month, neutral to lower production levels and the possibility of an unseasonable storage withdrawal.

The September 24 natural gas contract lost .041 on Tuesday settling at 2.148 while ending a 5-day run of consecutively higher closes.
The trend remains up with Monday’s 2.256 high being near term resistance followed by 2.340-2.350 which is the 200 day moving average and the 38% retracement of the June-July downtrend.
If 2.340-2.350 resistance is broken, the 50% retracement at 2.500 and the 62.8% retracement at 2.655 will become the next areas of resistance.
Once this current rally runs its course, renewed weakness is expected.
10 day moving average support is at 2.080 with longer term support at 1.850-1.856.
Moving Average Alignment – Neutral- Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -51.64






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