

A looming cold front along with surging LNG export demand continued to drive nat gas prices higher during Tuesday’s session. A very cold pattern is in store for the Central and Eastern US during the 6-10 day period, with conditions in the Midwest forecast to be strongly below normal. These frigid conditions could further widen the storage deficit while potentially disrupt strong production levels. March futures added on another 7.5 cents yesterday to settle at $3.519.

Feedgas deliveries to Plaquemines LNG hit their highest level to date yesterday as the facility was given authorization to introduce gas to another liquefaction block. Feedgas flows were estimated at nearly 1.5 BCF/day, up from the 1.1 BCF/day average for the first 10 days of February. The continued ramp up at Plaquemines helped push total feedgas demand to 15.7 BCF/day yesterday, just below the all time record of 16.1 BCF/day reached on Jan 18.
Rebounding production and milder weather conditions last week are expected to result in a lower than normal withdrawal for the week ended Feb 7. Platts projects a pull of 94 BCF, well below the 5 yr avg draw of 144 BCF but above last year’s draw of 60 BCF. This would mark the first below average storage withdrawal in 4 weeks. Looking ahead to the week in progress, a return to triple digit pulls is expected. Projections currently suggest a pull in the 185-195 BCF range.

February's STEO from the EIA shows nat gas stocks ending withdrawal season about 4% below the 5 yr avg. The agency raised its nat gas consumption estimate for Q1 by 2.3 BCF/day to 108.8 BCF/day while lowering its estimate for Q2 by 1.4 BCF/day to 77.2 BCF/day. The EIA projects nat gas consumption will rise 2.3 BCF/day to 108.8 BCF/day in Q1 while Q2 demand estimates were lowered by 1.4 BCF/day to 77.2 BCF/day.
Prices are on the rise again this morning. The likelihood of production freeze offs remains a supportive factor with disruptions likely to be limited to the Midcon and Appalachia regions.
Technical Analysis

The spot March 25 contract has closed higher 5 out of the past 7 sessions settling Tuesday at 3.519, up .075 (2.2%).
38% retracement resistance of the January downtrend at 3.515 was broken on Tuesday turning the 61.8% retracement at 3.680 into the next retracement resistance.
3.680 retracement resistance is near daily continuation chart 40 day moving average resistance currently at 3.625 and will be an important resistance area, if reached.
If either resistance area holds, the primary trend will remain sideways to down with the 10 day moving average at 3.325 being near term support.
Longer term support is at 2.990-3.000 which is weekly low support as well as the 50% retracement support of the 2024-2025 uptrend.
If 2.990-3.000 support is broken, 2.660 will become the next area of support.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index -49.80






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