

Upward momentum continued to build Friday following a modest storage injection that left the surplus at its lowest level since January. Current estimates suggest the surplus will continue to narrow over the coming weeks. Adding onto to Thursday’s 10.9 cent gain, Oct futures settled Friday’s session up another 2.1 cents at $2.275. For the week, the contract advanced about 7%.

Providing support to the nat gas market, LNG feedgas demand has been on the rise since late Aug, peaking this past weekend at 13.6 BCF/day. Feedgas demand is down slightly this morning at 13.4 BCF/day. For the month so far, feedgas demand is averaging 13.3 BCF/day, up 0.4 BCF/day from Sep 2023.
The Matterhorn Express pipeline running from the Permian to Katy, TX has begun flowing gas. The pipeline is expected to move more significant volumes of gas over the next month or 2. This should help alleviate pressure in the Permian while turning Waha prices positive.
Production is currently a neutral factor, averaging at 101.2 BCF/day so far this month. This is 3.6 BCF/day lower than a year ago. Over the next 2 weeks, Platts is projecting output to average 101.3 BCF/day.
The nat gas rig count fell by in the week ending Sep 6 to 94 rigs. Gas directed drilling rigs are down 19 from a year ago.

The market is trading lower this morning as a pickup in tropical activity appears to be overshadowing extreme heat across the SW and Southern CA.
Tropical cyclone 6 in the southwestern GOM is expected to become a tropical storm later today and could reach hurricane status before making landfall late Wed/early Thur in Louisiana. The current path poses a downward risk to gas demand given the potential for widespread power outages.

The October 24 natural gas contract tested 200 day moving average on the daily continuation chart resistance on three occasions last week with resistance holding each time.
With resistance holding last week, the primary trend remains sideways to down.
After closing Friday’s session at 2.275, the October contract is currently down .085 trading at 2.190 in today’s early session.
The 10 and 40 day moving averages have converged at 2.105-2.110 and are near term support followed by 2.000.
Longer term support is the double bottom low at 1.856. This support 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 area of support.
200 day moving average resistance is at 2.250 today followed by 2.301 weekly high resistance. A breakout above 2.301 will turn the trend back higher.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 53.29






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