By: Heather Wine, Senior Risk Manager - Energy
4-Year price deciles Normal & Redistributed
What appeared to have already been priced in, storage levels posted their first ever “Janjection,” or January injection. Unseasonably mild weather along with a rebound in production following December’s freeze off led to this historic, January build Despite the increase in stocks, price strength didn’t budge yesterday. Feb futures settled 2.4 cents higher at $3.695.
For the week ended Jan 6, the EIA reported a build of 11 BCF, leaving total gas in storage at 2.902 TCF. Stocks are now 40 BCF below the 5 yr avg and 140 BCF below last year. The injection was mostly a result of a 27 BCF build to stocks in the South Central region and a 9 BCF build in the East. These additions were offset by a 16 BCF draw in the Midwest as well as smaller draws in the Mountain and Pacific regions.
Demand levels continue to average well below normal with month to date consumption at 109.6 BCF/day, 17.5 BCF/day lower than last year. Res/comm usage is the biggest contributor to the decline, averaging 12.3 BCF/day below normal at 37.9 BCF/day.
Weather outlooks continue to show a change to cooler temps for the coming 11-15 day period, particularly across the west where below normal temps are expected. The East Coast will continue to see above normal readings during this time.
Early estimates for next week’s report range from a draw of 69 BCF to 112 BCF.
Prices are currently trading lower ahead of the 3 day weekend.
The February contract rallied up to a 3.946 high on Thursday, up .275 from Wednesday’s close.
Early strength faded as the rally stalled at 10 day moving average resistance. With resistance holding, prices sold off into the close with the February contract finishing the day at 3.695, up .024.
Yesterday’s failed rally has been followed by renewed selling today with the 3.422 weekly low being primary support.
If 3.422 support is broken, the 78% Fibonacci retracement from the June 2020 low up to the August 2022 high at 3.320 will become the next area of support. The final 88% retracement support is at 2.465.
The 10 day moving average at 3.855 remains primary resistance.
Relative Strength Index – 31.43
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