

For the first time in 7 days, nat gas prices edged higher yesterday following a volatile session ahead of expiration. The Sep contract went off the board with a gain of 2.6 cents to settle at $1.93. The now prompt month October contract settled 1.2 cents higher at $2.097. The recent selloff occurred on rising production and mild Sept weather. Support yesterday stemmed from an emergency shutdown at Freeport LNG with the market’s focus also turning towards weekly storage data.

Today’s storage report covering the week ended Aug 23 is expected to show a build of 39 BCF. This compares to last year’s build of 28 BCF and the 5 yr avg build of 43 BCF. The surplus likely fell further for the week in progress as heat across the Micdon and NE supporting cooling demand. Early estimates for the week ending Aug 30 suggest a build of 34 BCF which would fall short of the 5 yr avg build of 51 BCF and come in near last year’s build of 33 BCF.
Freeport LNG is on track to return to service today after shutting down all 3 trains on Wednesday. The plant shut after a fire safety suppression system unexpectedly activated during routine maintenance. Gas flowing to Freeport is on track to hit 1 BCF/day today. LNG feedgas demand fell yesterday to 11.2 BCF/day with estimates this morning at 12.1 BCF/day.
Output has held up well this week, averaging about 102.3 BCF/day. Production this morning is coming in 0.5 BCF/day lower at 101.7 BCF/day, driven by the NE and Rockies regions. Month to date, output is averaging 102.1 BCF/day. This is down 1.3 BCF/day from Aug 2023.

Prices are trading lower this morning as temps east of the Rockies could fall below 30 yr norms heading into early September. The next 2 weeks are expected to see about 123.7 CDDs, which is on the cooler side.

The September 24 natural gas contract, which expired on Wednesday’s close, spiked down to 1.856 low in yesterday’s trade, the exact same level the August 24 contract spiked down to in last month’s expiration.
A double bottom low reversal may have formed at 1.856 which will need to be confirmed in upcoming trade.
The new front month October 24 contract closed at 2.097 on Wednesday .167 above the price of the September contract which settled at 1.930.
This has created a large gap on the daily continuation chart between 2.000-2.093 which has been partially closed on early weakness today.
1.856 remains primary support. This coincides with the 78% retracement of the 2024 uptrend at 1.850. If 1.850 support is broken, the final 88% retracement at 1.680 will become the next downside objective.
The 40 day moving average at 2.128 held as resistance overnight with the current overnight high at 2.128.
If 40 day moving average resistance is broken, the 200 day average at 2.275 will become the next area of resistance. A breakout above the 200 day average will turn the trend back higher.
Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 46.69






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