

Spot month gas prices continued their decline on Tuesday, falling another 5% with trade primarily focused on warmer weather expectations for the next 2 weeks. Both the NWS and Maxar show current frigid temps moderating later this week into mid December. Production levels are also holding up near 103 BCF/day. The Jan contract settled Tuesday’s trade 17.1 cents lower at $3.042.

Res/comm usage hit a higher than normal 46.9 BCF/day on Monday but has begun to recede, coming in this morning at 41.6 BCF/day. With less cold on the horizon, demand levels are projected to decline substantially from recent highs. Platts projects heating demand will average 38.7 BCF/day over the next week and will fall to an average of 34.9 BCF/day during the 8-14 day period. Total demand is estimated this morning at 132.9 BCF/day, 6.7 BCF/day lower than yesterday. Month to date, total demand is estimated at 138.8 BCF/day, 22.7 BCF/day higher than Dec 2023.
Driven by last week’s significant cold snap, tomorrow’s storage report is expected to reveal the season’s first substantial withdrawal of 42 BCF. This compares to last year’s draw of 81 BCF and the 5 yr avg draw of 47 BCF. The supply/demand balance last week tightened by more than 7 BCF/day. Below freezing temps helped boost gas fired heating demand by more than 40% week over week across the Midcon and NE while output averaged 103.2 BCF/day. For the week in progress, estimates suggest a very hefty withdrawal near 190 BCF.

Prices continue to trend lower this morning on stronger output and more widespread above normal temps featured in the 8-14 day forecast. Production levels have rebounded back to 104 BCF/day as of this morning.

After losing .140 or 4.4% in Monday’s session, the spot January 25 natural gas contract was down an additional .171 or 5.3% on Tuesday settling at 3.042.
Overnight selling has dropped the January contract back toward former “breakout” resistance, now support, at the 3.000-3.020 level.
Oversold indicators on the 60-minute chart suggest a near term low may be forming.
If 3.000-3.020 support holds, a rally back higher following a .550+ sell off from last week’s 3.563 high is expected.
10 day moving average resistance is at 3.230 today followed by 3.370 which is the top of gap created on Monday’s gap lower open. Longer term resistance is at 3.563.
If 3.000-3.020 support fails to hold, the 40 day moving average at 2.780 will become the next area of support.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 50.62






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.



