

A recovery in export demand on Monday along with a spike in weather driven demand helped boost nat gas prices. After dropping to near zero last week, volumes at Freeport showed signs of improvement. Chilly weather also prompted a spike in heating demand across the Midwest and South. May futures settled 3.9 cents higher at $1.791 while the June contract rose 7.7 cents.

Production remains subdued as several energy firms delay well completions and cut back on other drilling activities. Output continues to teeter near the 100 BCF level, coming in this morning at 99.7 BCF/day. Month to date, output is averaging 100.6 BCF/day, down 0.9 BCF/day from April 2023.
US LNG feedgas demand has faltered this month amid seasonal maintenance. LNG exports last week fell to their lowest levels since May 2023. Feedgas demand has been on the rebound this week as flows to Freeport’s Train 3 restarted over the weekend, hitting 24% of capacity yesterday. The other 2 trains at Freeport are expected to remain under repair through May. Corpus Christi operations also rose to 80% of its capacity on Monday. Total feedgas demand increased to 12.7 BCF/day yesterday and remains steady this morning.

Prices are trading lower this morning as the market looks ahead to Thursday’s weekly storage data that is expected to show an increase in the 5 yr avg surplus which currently stands at 622 BCF. Friday’s expiration of the May contract could also inject some volatility as the previous 2 expirations saw prices spike lower.
After coming in above 100 BCF the past 2 days, total demand is coming in 4.8 BCF lower on the day at 95.3 BCF/day. The decline is mostly being driven by a 3.9 BCF drop in res/comm demand.

Another narrow range, low volume trading day on Monday as the spot May 24 contract held in a .079 daily range closing the day at 1.791, up .039.
The 10 and 40 day moving averages have converged at 1.765-1.770 with the May contract trading just over this level.
Friday is expiration of the May 24 contract. The past two monthly expirations have seen spikes down to the 1.500 area, 1.511 in late-February and 1.481 in late-March. It will be interesting to see how Friday’s expiration turns out.
1.940-1.950 is the next area of resistance if buying continues followed by the early-March 2.009 high.
1.650-1.660 is near term support followed by 1.481-1.511 weekly low support.
Moving Average Alignment – Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -50.09






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