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Daily Natural Gas Market Update 4-8-25

By: Heather Wine, Senior Risk Manager - Energy

Daily Natural Gas Market Update
 
Heather Wine
 
Senior Risk Manager | (312) 373-8250StoneX Financial Inc. - FCM Division Heather.Wine@stonex.com 
StoneX Value Matrix
image-20250408081143-1
Source: StoneX Value Matrix (2), Bloomberg
StoneX Commodity Indicator
image-20250408081212-2
 
Source:  StoneX Commodity Indicator (1), Bloomberg
Fundamentals & Weather

Following an early session rally, the nat gas market ultimately extended losses during Monday’s trade as production moved back toward record highs while fears tariffs could reduce global economic growth and energy demand lent additional pressure.  Prompt month gas prices settled 18.2 cents lower at $3.655. down nearly 50 cents over the past 2 days.

image 110853
Source: Bloomberg, CME

 Production levels are coming in 3 BCF lower on the day this morning at 102.7 BCF/day. Lower output is due to planned maintenance, including the start of a major outage on the Mountain Valley Pipeline that is limiting deliveries to the Transcontinental Gas Pipeline while work is also being done on the Gulf Coast Express pipeline, limiting flows our of the Permian.  The maintenance work should be wrapped up by the end of the week. 

 

image 110854​​​​
Source: Bloomberg

A late season cold spell across the East this week is expected to boost heating demand.  Res/comm usage is coming in 4.9 BCF/day higher this morning at 32.5 BCF/day.  A drop of 3.3 BCF/day in power burn is helping offset stronger heating needs. Heating demand is projected to remain strong over the next several days before seeing a more significant decline during the 8-14 day period as temps turn warmer than normal.  LNG feedgas demand has been mostly steady near 16.3 BCF/day.  

​​image 110855
Source: NOAA

Prices are higher this morning as fundamentals remain mildly supportive.

 

Technical Analysis

 

image-20250408081439-3
Source: Bloomberg, CME

Over the past two sessions, .483 or 11.7% has been erased from the value of the May 25 contract after breaking out under lower-4.000 support.

In yesterday’s trade, the May contract broke out under 2-week support at the 3.689 level which likely initiated fund liquidation.  Monday’s volume came in at a 1+ month high of 298,843 contracts.

With 10 and 40 day moving average support broken, and the alignment between these two averages bearish, the trend is now down into typical post-winter seasonal weakness.

The 38% retracement of the 2024-2025 uptrend at 3.380 is the next downside objective for the May contract.  Near term support is Monday’s 3.600 low.

If 3.380 support is reached and broken, the 50% retracement at 3.015 will become the next longer term support.  3.000 is also near the daily continuation chart 200 day moving average and was former daily high resistance.  

3.680-3.720 is near term resistance with longer term resistance at the 10 and 40 day moving averages currently at 3.930 and 4.030, respectively.

Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish

Relative Strength Index - 41.70

image 110857
Source: Bloomberg, CME
image 110858
Source: Bloomberg, CME
image 110859
Source: Bloomberg, CME
image 110084
Source: Bloomberg, CME, StoneX Value Matrix (2)
image 110083
Source: Bloomberg, CME, StoneX Value Matrix (2)
Forward Curve Pricing
image 110856
Source: Bloomberg, CME
 
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