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Daily Natural Gas Market Update 1-30-25

By: Heather Wine, Senior Risk Manager - Energy

Daily Natural Gas Market Update
 
Heather Wine
Senior Risk Manager | (312) 373-8250StoneX Financial Inc. - FCM Division Heather.Wine@stonex.com 
StoneX Value Matrix
image-20250130084823-1
Source: StoneX Value Matrix (2), Bloomberg
StoneX Commodity Indicator
image-20250130085114-3
 
Source:  StoneX Commodity Indicator (1), Bloomberg
Fundamentals & Weather

Thin volume in the Feb contract led to volatile price action ahead of yesterday’s expiration.  The spot month traded lower the first half of the session amid mild weather forecasts and falling demand expectations.  Midday support stemmed from expectations for a near record withdrawal today while the Fed expressed it would hold steady on interest rates. The Feb contract rolled off with a 6.4 cent gain to settle at $3.535, down about 5 cents from its daily high.  The new spot month Mar contract settled with a 4.8 cent gain. 

image 107437
Source: Bloomberg, CME

Today’s storage report is expected to show stocks fell 314 BCF last week, which would mark the 4th  ever 300+ BCF withdrawal.  While a draw this size would fall short of the all time record of 359 BCF, it remains bullish in comparison to last year’s draw of 234 BCF and the 5 yr avg draw of 189 BCF.  If estimates prove correct, stocks would fall to 2.578 BCF, flipping the 5 yr avg surplus that has been in place for 3 years into a deficit. 

Early estimates for the week in progress suggest another larger than normal draw in the 205 to 230 BCF range. 

image 107438​​​​
Source: NOAA

LNG feedgas demand is estimated this morning at 14.9 BCF/day, up 0.8 BCF/day from Wednesday. Total demand however is coming in 3.3 BCF/day lower due to a 2.6 BCF/day decline in heating demand and 1 BCF/day drop in power burn. 

Heating demand is expected to decline further in the coming few days before picking back up during the 6-10 day and 8-14 day periods.  
 

​​image 107439
Source: Bloomberg

Venture Global has received permission to introduce feedgas to another liquefaction block at Plaquemines LNG. Feedgas demand there has averaged about 1.1 BCF/day since production began in mid Dec.

Prices are currently trading lower as production levels have shown steady improvement this week, coming in this morning at 103.6 BCF/day.  Brief upward momentum could stem from storage data and less warmth during the 11-15 day  period. 

 

Technical Analysis

image-20250130084948-2
Source: Bloomberg, CME

The new front month March 25 natural gas contract closed Wednesday at 3.170, .365 below the price of the expired February 25 contract ,creating a massive overhead gap on the daily continuation chart.

With 40 day moving average support broken earlier in the week, the trend is now down into the February/March timeframe when a post-winter seasonal low is historically set.

3.090-3.100 is near term support for the March contract followed by 3.000.  Longer term support is the 50% retracement of the 2024-2025 uptrend at 2.925.

Trade up to 3.310 will close the gap created on yesterday’s expiration and is near term resistance. 

Moving Average Alignment – Neutral - Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish

Relative Strength Index -39.08

image 107443
Source: Bloomberg, CME
image 107441
Source: Bloomberg, CME
image 107442
Source: Bloomberg, CME
image-20250103081230-5
Source: Bloomberg, CME, StoneX Value Matrix (2)
image-20250103081209-4
Source: Bloomberg, CME, StoneX Value Matrix (2)
Forward Curve Pricing
image 107440
Source: Bloomberg, CME
 
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