The new spot month November contract posted a strong rally on Friday as prices looked beyond storm related demand destruction, focusing instead on tightening supply ahead of winter. Helene moved ashore after making landfall late Thursday as a Cat 4 hurricane, knocking out power to 4 million customers. Last week’s storage report revealed the 11th straight below normal injection, narrowing the surplus to just 7% above the 5 yr avg, down from 40% back in March. Nov futures settled 14.9 cents higher at $2.902. Support extended into the winter strip which was up nearly 19 cents on the day.
Production held mostly steady Friday with estimates at 100.1 BCF/day, down 0.3 BCF day over day. GOM output increased on the day, rising to 1.3 BCF, leaving about 18% of Gulf output still shut in as of Friday.
The nat gas rig count rose by 3 last week to 99 rigs, their highest since late July. Output for September averaged 102.1 BCF/day, down from 103.2 BCF/day in August.
LNG terminals were spared by Helene with feedgas demand Friday estimated at 12.6 BCF/day, up from earlier in the week. Volumes were steady at the Elba Island terminal in Georgia while the Cove Point remains offline for annual maintenance. For Sep, LNG feedgas eased to an average of 12.7 BCF/day, down 0.2 BCF/day from Aug.
The tropics remain pretty active with currently only Tropical Depression 12 in the central Atlantic expected be a major hurricane by mid week but it does not pose any threat to land at this time. There are also 2 other areas of interest of which one could move into the GOM by the weekend, possibly impacting the eastern Gulf.
Prices are easing slightly this morning in response to a small output increase over the weekend and forecasts for lower demand over the next 2 weeks.
The new front month November 24 natural gas contract surged higher on Friday to close the week of trade gaining .149 (5.4%) to settle at 2.902. Volume was heavy at 224,258 contracts.
For the week, the November contract was up .183 (6.7%) settling up on a weekly basis for a 5th consecutive week.
The November contract is testing 200 day moving average resistance on the November chart at 2.950 today which is closely followed by daily continuation chart trend line resistance near 3.000.
If 2.950-3.000 resistance holds, the market should begin a retest of downside support levels the first being 2.740-2.750.
Longer term support is at 2.650 which will close the open gap created last week during expiration of the October 24 contract followed by the 10 day moving average currently at 2.555.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 72.02 (in overbought area)
This material should be construed as the solicitation of an account, order, and/or services provided by the FCM Division of StoneX Financial Inc. (“SFI”) (NFA ID: 0476094) or StoneX Markets LLC (“SXM”) (NFA ID: 0449652) and represents the opinions and viewpoints of the author. It does not constitute an individualized recommendation or take into account the particular trading objectives, financial situations, or needs of individual customers. Additionally, this material should not be construed as research material. The trading of derivatives such as futures, options, and over-the-counter (OTC) products or “swaps” may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand the risks prior to trading. Past results are not necessarily indicative of future results.
All references to and discussion of OTC products or swaps are made solely on behalf of SXM. All references to futures and options on futures trading are made solely on behalf of SFI. SXM products are intended to be traded only by individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM.
SFI and SXM are not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Contact designated personnel from SFI or SXM for specific trading advice to meet your trading preferences.
(1) The StoneX Market Indicator provides an overall view of market sentiment for a commodity based on the quantification of fundamental, technical and historical market data related to that commodity. The StoneX Market Indicator History graphically represents each day’s actual very bearish to very bullish signal. This history contains the sum of all factors, excluding weather forecasts.
(2) The StoneX Value Matrix provides a measure of historical value by analyzing historical price data distributed into 10 deciles. The prices are adjusted for inflation using the Producer Price Index (PPI) published by the U.S. Bureau of Labor Statistics.
Reproduction or use in any format without authorization is forbidden. © Copyright 2024. All rights reserved.
