

Expectations for tighter supply as the market contends with one last bout of summer heat sent natural gas futures higher to start the week. The Sep contract settled Monday’s session at $2.235, up of 11.2 cents on the day while the October contract also tacked on about 11 cents.

Production eased slightly over the weekend, hovering near 101.7 BCF/day. As of this morning, it has fallen just over 1 BCF/day to 100.8 BCF/day. This is likely due to August maintenance events. Producers are still expected to implement more supply cuts during this year’s shoulder season.
LNG flows were down slightly yesterday from Friday’s level coming in at 12.9 BCF/day Monday. Feedgas demand has fallen further this morning to 12.6 BCF/day.
Sabine Pass could see a pullback in feedgas demand this week as Cheniere is expected to begin maintenance on the Creole Trail Pipeline. The work is expected to last about a week and will impact roughly 0.5 BCF/day.

Weather outlooks remain supportive for the latter part of August with summerlike heat expected to make a return. While weather systems tracking across the Great Lakes, Ohio Valley and East this week will keep temps on the cooler side, very hot conditions are forecast for the South and Central US. Portions of TX are currently under excessive heat warnings.
The Midwest will see a pattern change this weekend into next week with temps rising 10 to 20 degrees. The hot pattern will remain in place during the 11-15 day period with much of the country averaging warmer than normal. According to Maxar, the next 15 days are forecast to total 154.8 CDDs which is at a 10 yr norm and on the hotter side of the 30 yr norm.
The market is pulling back slightly this morning with the spot trading about 4 cents lower on the day.

The spot September 24 natural gas contract reversed back higher on Monday following two days of selling rallying off 10 day moving average support to close the day at 2.235, up .112 (5.3%).
With the 10 day moving average holding as support, the trend remains sideways to higher.
There is a confluence of resistance beginning at last week’s 2.301 high followed closely by the 200 day moving average at 2.320. The final area of resistance is at 2.350, the 38% retracement of the June-July downtrend.
A breakout above 2.350 will turn the 50% retracement at 2.500 into the next area of resistance.
10 day moving average support is at 2.175 today followed by trend line support beginning at the 1.856 July low currently near 2.000. Longer term support is the 1.856 July low.
Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -55.07






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