

Prices have been trending lower the past few weeks on fears of demand destruction spurred by recent tariff announcements and trade tensions. After trading lower early yesterday on recession fears dominated, the prompt month closed near flat with bargain buying aiding in the price recovery. Lighter output also provided mild support. The May contract settled .004 higher at $3.329.

Estimates for this week’s storage report are more than 50% lower than the previous week’s build given tighter fundamentals. Platts is calling for an injection of 24 BCF which is also half the size of the 5 yr build of 50 BCF and lower than last year’s build of 46 BCF. If correct, stocks would rise to 1.854 TCF while the 5 yr avg deficit would widen for the first time in 5 weeks. Demand rose last week by 7 BCF/day with res/comm usage leading the way higher while total supply rose 2 BCF/day week over week. Next week’s number is expected to be in line with the 5 yr build of 58 BCF.
We are seeing a maintenance related pullback in production. Platts estimated output Tuesday at 104.6 BCF/day, down 1.4 BCF day over day. Early production estimates show output unchanged this morning.
LNG exports have also pulled back from recent highs of 16.8 BCF/day. Feedgas demand was pegged yesterday at 16 BCF/day with this morning’s estimate at 16.1 BCF/day. Underlying concern remains that the trade war will impact US LNG feedgas demand as countries look for new supply sources.

Prices are down about a nickel this morning as weather forecasts turned more bearish with mild conditions expected to boost storage injections later this month.
Technical Analysis

The May 25 natural gas contract closed flat on Monday settling at 3.329, up 4 ticks, but is down again today as it remains in a bearish downtrend.
The spot natural gas contract has closed down 4 out of the past 5 weeks as it trends down in post-winter weakness.
After breaking out under the 38% retracement support of the 2024-2025 uptrend last week at 3.380, the 50% retracement at 3.015 is the next downside objective for the May contract.
The lower-3.000 area is the 50% retracement, the 200 day moving average on the daily continuation chart, and former “breakout” resistance.
If the lower-3.000 area is reached and holds as support, a post-winter low may be in place.
If lower-3.000 support does not hold, the 61.8% retracement at 2.655 will become the next area of support.
Former support at 3.380 is near term resistance followed by the 10 day moving average currently at 3.590.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 36.10






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