

Nat gas prices pushed higher to end the week on concern over dwindling storage levels. Stocks as of Feb 14 stand at a deficit of 118 BCF to the 5 yr avg. That deficit could more than double by the end of the month. Feedgas demand remains supportive as it breaks record highs, coming in Friday at 16.7 BCF/day. This market continues to show a big deviation from historical price action. Mar NG settled 8.2 cents higher at $4.234.

Temps have begun to warm up across the country, with widespread above to much above normal readings dominating the entire US this week. The warmer than normal conditions will continue into the 6-10 day period with the NE seeing a round of colder air mid period. Today’s forecast is much warmer than projected on Friday across the eastern US, resulting in a loss of 16 HDDs. The 11-15 day outlook shows slightly below normal temps across the NE while above normal conditions continue to favor the entire Central US.
The warm up has allowed production levels to rebound after being impacted by freeze offs last week. Output is estimated this morning at 104.6 BCF/day, 0.6 BCF higher on the day and up 1.4 BCF/day from Friday. Prior to the freeze offs, output had reached record highs in early February just below 107 BCF/day.

Total demand is coming in lower this morning by 5.5 BCF/day at 122.5 BCF/day, down significantly from Friday’s level of 157.9 BCF/day. Today’s decline stems mostly from a 5.1 BCF/day drop in heating demand to 33.9 BCF/day
Spot month prices have plunged this morning by more than 6% amid a warming trend ahead of March futures expiration on Wednesday. Weekend forecasts shifted warmer, which will help improve the overall market balance.
Technical Analysis

The highlight of last week’s trade was a rally up to a new 2+year high at 4.476 by the March 25 contract before closing Friday at 4.234.
For the week, the March contract was up .509 (13.7%), closing higher for a 3rd consecutive week.
The March contract gapped lower by .169 from Friday’s close dropping under 4.000 support in today’s early trade.
The 10 day moving average at 3.850 is the next area of support followed by the 40 day average at 3.700. Longer term support is at the 3.000 level.
4.148 is the top of the gap created overnight and is near term resistance followed by last week’s 4.476 high.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -55.51






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