

Following early losses, spot month nat gas prices turned higher midday Friday as weather outlooks added some cold back in the forecast for the first week of February. Losses were initially sparked by overnight forecasts trending warmer. Late session gains reflected uncertain longer range weather trends. Feb futures settled 8.2 cents higher at $4.027.

With the arctic cold now behind us, demand levels are dropping off. Total consumption for Friday was pegged at 151.9 BCF/day, down from last Tuesday’s peak of 184.3 BCF/day. Res/comm usage and power generators have been the key drivers of the decline.
Demand this morning is estimated at 141.2 BCF/day as heating demand has fallen more than 23 BCF/day while power burn has declined about 15 BCF/day. Based on current weather forecasts, demand should continue to decline, hitting an average of 129.4 BCF/day during the 8-14 day period.
Production levels are returning after being impacted by freeze offs. A recovery across the East, Midcon and Texas helped drive output higher on Friday to 101.8 BCF/day. Production continued to rebound this past weekend and is estimated this morning at 102.9 BCF/day. Total output month to date is averaging 101.7 BCF/day, up 0.6 BCF/day from Jan 2024.

Nat gas prices are tumbling this morning as weather forecasts trended warmer over the weekend, resulting in a loss of HDDs heading into early February. Maxar’s outlook resulted in a net loss of 19.7 HDDs with warmer changes noted in the Eastern US during the 1 to 5 and 11 to 15 day outlooks while the south trended warmer during the 6-10 day period.
A recovery in both output and LNG feedgas demand is also adding downward pressure. LNG feedgas demand is estimated this morning at 14.9 BCF/day, up from last Thursday’s 10.3 BCF/day.
Technical Analysis

The February 25 natural gas contract overcame early selling on Friday to close the day strong gaining .015 to settle at 4.027.
For the week, the contract was up .079 or 2%.
Friday’s volume was extremely light at 87,568 contracts likely indicating short-covering ahead of the weekend.
The February contract has gapped lower by .094 on today’ s open falling under 10 day moving average support.
Last week’s 3.711 low is near term support followed by the 40 day moving average at 3.600. A close under the 40 day average will turn the longer term trend back down.
The 10 day moving average at 3.955 is near term resistance followed by last week’s 4.048 high. Longer term resistance is the 4.369 high set two weeks ago.
Bearish divergences on the short term trend following index and daily RSI suggest a seasonal high may be in place.
Moving Average Alignment – Neutral - Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index -50.48






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