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Daily Natural Gas Market Update 5-27-26

By: Heather Wine, Senior Risk Manager - Energy

StoneX Value Matrix

image-20260527075037-1

Source: StoneX Value Matrix (2), Bloomberg

Fundamentals & Weather

Nat gas prices saw choppy trade on Tuesday, with today’s expiring June contract falling 1.3 cents lower at $2.894.

Prices pushed higher overnight ahead of expiration, with the June contract up more than 6 cents while July NG has extended gains above $3.00.

The South and East are expected to see cooler-than-normal temps through much of the 6–10 day period, before moderating back to near normal levels in the 11–15 day outlook.  Further out, the 3-4 week NWS outlook favors above normal temps along the West and SE, while much of the central and eastern interior US carries equal chances for above, below or near normal conditions. 

Source: NOAA

Power burn has strengthened notably since the weekend, climbing roughly 5 BCF/d over the past 5 days to reach 36.2 BCF/d this morning, supported by rising temps across the Plains and Midwest.

Based on the latest forecasts, demand is expected to ease in the near term, with power burn averaging 33.1 BCF/d next week before rebounding to approximately 34.1 BCF/d in the 8–14 day period.

image 131887Source: StoneX

Cooling demand strength last week is expected to result in a slightly smaller than normal storage build for the week ended May 22, with injections projected around 93 BCF vs the 5 yr avg of 97 BCF and last year's 104 BCF.

On the demand side, power burn increased by 3.2 BCF/d week over week, offsetting a 2.9 BCF/d decline in res/comm consumption, while production posted only a modest uptick.

Looking ahead, the current week is expected to see a somewhat larger build near 108 BCF, exceeding the 5 yr avg of 101 BCF but still trailing last year’s 119 BCF injection.

image 131886
Source: StoneX

image-20260527075057-2

Source: Bloomberg, CME

Today’s expiring June 26 natural gas contract rallied up to a 2.989 high on Tuesday but failed to breakout over 3.000 resistance.

With resistance holding, the June contract pulled back into the close settling the day at 2.894, down .019.

The near-term trend remains sideways to down after closing back under 10-day moving average support last week.

Three day weekly low support is at 2.857 followed by the 40-day moving average currently at 2.780.

The 10-day moving average at 2.965 extending up to 3.000 is primary resistance.  A breakout above 3.000 will turn the near-term trend back up with last week’s 3.138 high being the next area of resistance.

Technical Indicators:  Moving Average Alignment – Neutral

Moving Average Alignment - Bullish

Long Term Trend Following Index – Bullish

Short Term Trend Follow Index - 54.52

image 131863

Source: Bloomberg, CME

image 131862

Source: Bloomberg, CME

image 131861

Source: Bloomberg, CME

image 131134

Source: Bloomberg, CME, StoneX Value Matrix (2)

image 131133

Source: Bloomberg, CME, StoneX Value Matrix (2)

Forward Curve Pricing

image 131864

Source: Bloomberg, CME

Disclaimer
(1)  The StoneX Commodity Indicator provides an overall view of market sentiment for a commodity based on the quantification of fundamental, technical and historical market data related to that commodity.  The StoneX Commodity Indicator History graphically represents each day’s actual very bearish to very bullish signal.  This history contains the sum of all factors, excluding weather forecasts.
(2) The StoneX Value Matrix provides a measure of historical value by analyzing historical price data distributed into 10 deciles. The prices are adjusted for inflation using the Producer Price Index (PPI) published by the U.S. Bureau of Labor Statistics.
 

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