

June futures gave up early gains yesterday to settle lower on the day as fluctuations in feedgas demand continue to drive market direction. The hefty oversupply also provided downward momentum. The June contract settled 3.9 cents lower at $1.991.

Cooler conditions last week across the Midwest and NE likely cut into injections. Gas fired heating demand rose back above 20 BCF/day, up 5.3 BCF/day week over week. Stronger production and higher imports from Canada added some supply however the market still tightened by 4.7 BCF/day. Platts is calling for a build of 54 BCF while Refinitiv is calling for a build of 47 BCF for the week ended Apr 26. This compares to last year’s build of 62 BCF and the 5 yr avg of 72 BCF.
For the week in progress, Platts is calling for a build of 83 BCF which compares to the 5 yr avg of 81 BCF.
According to Refinitiv, US LNG exports fell for a 4th straight month in April to 6.19 mmt amid recurring issues at Freeport.
Concern is lingering over Freeport’s recovery as the pipeline may not reach its typical summer utilization near 90% until June given previous challenges to complete maintenance in a timely manner. As of this morning, feedgas volumes are down 1 BCF/day at 11.9 B CF/day.

Nat gas prices are extending yesterday’s losses this morning as LNG maintenance limits demand for feedgas while above normal cooling demand in the South is being offset by much lower than normal heating demand in the North.

The June 24 natural gas contract traded up to a 2.092 high on Tuesday on follow through buying from Monday’s rally higher.
Once early morning buying eased, sellers came back into the market dropping the June contract to a 1.991 close, down .039 for the day.
A bearish dark cloud cover Japanese candlestick reversal formed on Tuesday’ daily bar but will need to see follow through selling today for confirmation.
Key support is at 1.900, the contract low for the June contract. If 1.900 support is broken, the bottom of the open gap on the daily continuation chart created during expiration of the May 24 contract at 1.600-1.610 will become the next downside objective.
Tuesday’s 2.092 high remains primary resistance. If broken, the mid-December 2.235 low will become the next upside objective.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -57.64






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