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Daily Natural Gas Market Update 12-6-24

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-20241206090045-1
Source: StoneX Value Matrix (2), Bloomberg
StoneX Market Indicator
image-20241206090059-2
Source:  StoneX Market Indicator (1), Bloomberg
Fundamentals & Weather

Gas prices closed higher Thursday but pulled back from intraday highs following a lighter than anticipated storage withdrawal.  A bump in LNG demand offered some support yesterday as did an overnight increase in HDD estimates. The Jan contract settled 3.6 cents higher at $3.079.

image 105014
Source: Bloomberg, CME

Trailing market expectations as well the 5 yr avg, the EIA revealed a withdrawal of 30 BCF for the week ended Nov 29.  The draw lowered supplies to 3.937 TCF with supplies now 185 BCF above last year and 284 BCF above the 5 yr avg.  The Midwest and East regions led with pulls of 19 BCF and 15 BCF, respectively. Stocks in the East are about 4% above the 5 yr avg while Midwest stocks are 5% above the 5 yr avg. The South Central region reported a net injection of 9 BCF.

Next week’s report is expected to reveal a much heftier pull given the frigid temps this week across the Midwest and East.  Early estimates call for a withdrawal of 138 BCF which compares to the 5 yr avg draw of 71 BCF.

image 105016​​​​
Source: Bloomberg

Production has remained above 103 BCF/day for much of this week, coming in this morning 103.4 BCF/day.  

Demand levels appear mostly steady this morning with minimal changes seen in the res/comm sector. Feedgas flows have been elevated amid steady Asian and European demand.  Total demand is estimated this morning at 146.1 BCF/day, unchanged from Thursday.  

​​image 105015
Source: Bloomberg

Prices are trading lower this morning amid steady production levels.  Cold conditions across the Midwest and East are also expected to briefly subside this weekend.

The latest 6-10 day forecast contains some variability with another round of cold on track to impact the eastern US early in the period with above to much above normal temps returning to the central US during the latter half of the period.  The 11-15 day outlook shows an overall warmer pattern across the entire country. 

 

image-20241206090151-3
Source: Bloomberg, CME

The January 25 natural gas contract closed .034 higher on Thursday settling at 3.079 while ending a three day run of consecutively lower closes.

A third day close under 10 day moving average support on Thursday is a negative factor heading into today’s session with 2.980-3.020 remaining primary support.

A close under 2.980 will turn the 40 day moving average at 2.800 into the next area of support.

 

10 day moving average resistance is at 3.190 today with longer term resistance at last week’s 2.563 high.

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

Relative Strength Index - 51.81

image 105018
Source: Bloomberg, CME
image 105020
Source: Bloomberg, CME
image 105019
Source: Bloomberg, CME
image 104801
Source: Bloomberg, CME, StoneX Value Matrix (2)
image 104800
Source: Bloomberg, CME, StoneX Value Matrix (2)
Forward Curve Pricing
image 105017
Source: Bloomberg, CME
 
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