

After trading in both positive and negative territory yesterday, nat gas prices ended with modest losses. The market appears to be discounting forecasts for hotter conditions next week, focusing more on a cold front that will sweep across the Great Lakes into the East Coast this weekend. Failure to break thru resistance over the past 2 days also lent pressure. Sep futures settled 2.1 cents lower at $2.177.

Storage data has come in lower than normal 13 of the past 14 weeks with the pace of injections this season running 21% lower than average. The 5 yr avg surplus currently stands at 375 BCF and could fall about 50 BCF over the next 3 reports given current weather outlooks and output projections.
The EIA is expected to report another below normal injection today of 29 BCF for the week ended Aug 16. This compares to last year’s 23 BCF injection and the 5 yr avg injection of 41 BCF. If correct, stocks would rise to 3.293 TCF, about12% above normal. BCF, 20 BCF lower than the 5 yr avg comparison.
LNG feedgas demand has remained resilient in the face of maintenance events this week. Feedgas demand hit 13.3 BCF/day yesterday, according to Platts but is coming in 0.4 BCF/day lower today at 12.9 BCF/day. LNG feedgas demand is expected to average near 13 BCF/day over the next 2 weeks.

Prices are sliding this morning ahead of storage data while forecasts are mixed for the next 2 weeks.
Cooler temps will prevail across the Northern US this week while intense heat remains in place across the South. The Midwest is expected to turn hotter late this weekend into early next week while warmer than normal temps favor the Mid Atlantic during the 6-10 day period.

The trend for the natural gas market may be ready to turn back down following a two week rally higher after the September contract failed to clear resistance at the lower-2.300 area.
This resistance was tested two times over the past two weeks reaching a 2.301 high last week and a 2.278 high this week.
Weekly low support is at 2.097. If broken, 2.000 will become the next area of support followed by the 1.856 July low.
Weekly high resistance is at 2.301 which includes the 200 day moving average at 2.305 today. This resistance is closely followed by the 38% retracement of the June-July downtrend at 2.350.
Moving Average Alignment – Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 47.36






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