By: Heather Wine, Senior Risk Manager - Energy
Nat gas prices extended Friday’s gains to start the week, rising another 5% as the market continued to react to last week’s sharp drop in nat gas drilling rigs. Data showed a 16 rig drop, leaving the total nat gas rig count at 141 as of May 12, the lowest since Apr 2022. This indicates an eventual decline in output later this year. June futures settled 10.9 cents higher at $2.375.
LNG feedgas demand has fluctuated by about 1 BCF/day over the past week. MTD, feedgas demand is averaging 13 BCF/day, 0.9 BCF/day higher than May’22. LNG feedgas is coming in this morning at 12.6 BCF/day, down 0.4 BCF on the day.
The market continues to build on upward momentum this morning, with the spot month trading about 7 cents higher.
The June 23 natural gas contract rallied higher for 2nd day on Monday testing 40 day moving average resistance before closing the session at 2.375, up .109.
The 40 day moving average held as resistance on Monday but is being tested again today at 2.360. There has only been one daily close above this average since mid-December 2022.
If 2.360 resistance is broken, 2.470 and 2.520-2.540 will become the next upside objectives. It should also indicate a post-winter seasonal low is finally in place.
Last week’s 2.147 low is near term support followed by the life-of-contract low for the June contract at 2.031.
Moving Average Alignment – Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Following Index – Bullish
Relative Strength Index – 53.13
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