

Following a steep sell off on Thursday, spot month gas prices ended Friday’s session near even. Losses held amid the ongoing market imbalance as we head into injection season while feedgas volumes remained muted. Additionally, forecasts suggested unseasonable warmth through the middle of this week across much of the US. May futures settled Friday’s session up 0.6 cent at $1.77.

Reduced LNG feedgas intake from both Freeport and Corpus Christi has been a major driver behind recent price action. It appears all 3 Trains at Freeport are offline due to a trip on Train 3 last week while the other 2 remain offline due to maintenance and repair work.
Preliminary estimates this morning show LNG feedgas demand down 0.6 BCF/day from Friday at 10.9 BCF/day. Month to date, feedgas demand is averaging 12.2 BCF/day, 1.7 BCF/day lower than Apr 2023’s 13.9 BCF/day.
Unseasonably warm conditions felt this past weekend from the Rockies to the Midwest remain in place and will continue to depress res/comm demand over the next few days. Since Friday, res/comm usage has declined 2.1 BCF/day to today’s estimate of 16.3 BCF/day. Power burn however has increased 1.7 BCF/day since Friday, coming in this morning at 29.3 BCF/day. Total demand is pegged at 91.9 BCF/day for today, 1.2 BCF/day lower than Friday.

A pattern change is expected during the 6-10 day period as colder, Canadian air settles into the Eastern US while above to much above normal readings return to the West. Another shift is forecast to occur in the 11-15 day period with temps cooling to normal along the West Coast while above normal temps move back into the East.
Maxar is forecasting a total of 116.1 HDDs over the next 15 days which is both lower than normal and lower than last year and would rank 8th warmest since 1950.
Prices are lower following Iran’s attack over the weekend on Israel while weak export levels and mild weather hamper near term demand. Once colder temps move back into the Midwest and NE later this week, demand levels will increase.

The May 24 natural gas contract closed nearly unchanged for a 2nd week in last week’s trade closing Friday at 1.770. For the week, the contract was down .015.
The May contract held above 40 day moving average support the past two weeks but this support at 1.755 today is being tested.
If 40 day moving average support is broken, the bottom of a gap created during expiration of the April 24 contract at 1.630 will become the next area of support.
Longer term support levels are the late-February and March weekly lows at 1.481-1.511.
If the early breakout under the 40 day moving average fails to hold, 10 day moving average resistance is at 1.810 followed by last week’s 1.943 high.
Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 44.87






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