

Rising for a 3rd straight session on Wednesday, gas prices received continued support from the persistent storage deficit along with fears over tariff wars. Short covering has also played a role in this week’s rally. The April contract traded in a 29 cent range yesterday before settling at $4.45, up 10 cents on the day. So far this week, the spot month has gained 61.6 cents. US prices are sharply diverging from TTF prices, which have fallen 31% since Feb 10. Will this be a precursor for the US market?

Following Trump’s implementation of 10% tariffs on Canadian Imports Tuesday, Canada retaliated by calling for reduced exports of electricity into the US. With the US a net importer of power from Canada, the decline could result in stronger US nat gas electricity generation. Pipeline imports of Canadian gas to the US hit year to date lows on Tue and Wed of 4.7 BCF/day, down from Monday’s 6.2 BCF/day. While partly due to tariffs, the decline was also a result of seasonality.
An extremely cold winter has led to record withdrawals this season, leaving stocks at a 12% deficit to the 5 yr avg and a 23% deficit to last year. Today’s storage report is expected to show a withdrawal of 92 BCF for the week ended Feb 28. This compares to last year’s draw of 56 BCF and the 5 yr avg draw of 94 BCF. The number is well below the previous week’s drawdown of 261 BCF as demand last week fell nearly 36 BCF led by a drop in res/comm usage and a rebound in production.

Early estimates for next week’s report suggest a draw of 71 BCF which would exceed both last year’s pull of 19 BCF and the 5 yr avg pull of 56 BCF. If the withdrawal pace matched the 5 yr avg over the remainder of heating season, stocks would total 1.62 TCF on March 31.
The April contract is currently trading about 9 cents lower.
Technical Analysis

The April 25 natural gas contract gained .100 in Wednesday’s session settling at 4.450 but posted a potentially bearish inside range day.
Volume was moderate at 224,571 contracts which followed Tuesday’s volume which was at a high for 2025. Blow-off top?
Lower trade today will be needed to confirm yesterday’s inside range reversal with prices currently down .030 in early trade.
The trend at this point remains up with Tuesday’s 4.551 high being primary resistance. If broken, the November 2018 high at 4.929 will become the next longer term resistance.
10 day moving average support is at 4.140 today followed by the 40 day moving average currently at 3.810.
The 40 day average held as support on Monday’s low. A close under this average will turn the trend back down.
A bearish divergence appears to be forming on the daily RSI index (new price high, lower RSI index high) and may also be forming on the trend following indicators. These types of divergences appear near market highs.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -62.77






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