

Following an early surge, nat gas prices sold off during most of Friday’s session on profit taking following the previous 4 day rally. Prices had strengthened substantially prior to Friday as forecasts for extreme heat across the eastern US boosted cooling demand expectations. July futures closed 14.2 cents lower at $3.847.

Sabine Pass appears to be exiting its 3 week maintenance period with LNG flows to the plant on track to rise to a 3 week high today. LNG feedgas demand is estimated this morning at 15.1 BCF/day, up from Friday’s 14.2 BCF/day. Month to date, LNG feedgas flows are averaging 14.1 BCF/day. Flows are projected to remain at an average of 14.9 BCF/day over the next 2 weeks.
Power burn has surged given the arrival of record summer heat across the Midwest and East this past weekend. Power burn is estimated this morning at 45.9 BCF/day, up from Friday’s 40.7 BCF/day. Cooling demand is expected to remain strong this week as the record breaking heat wave continues over the East Coast. Overall demand is coming in this morning at 102.4 BCF/day, 3.1 BCF/day higher than the month to date avg of 99.3 BCF/day.

Despite supportive fundamentals, prices are starting the new week off lower ahead of this week’s July futures expiration and uncertainty following weekend attacks on Iran. With Iran the 3rd largest gas producer behind the US and Russia, any pauses to their gas flows could increase US LNG exports.
The spot month July contract is currently trading 12 cents lower on the day.
Technical Analysis

The July 25 natural gas contract began last week’s trade with a breakout above daily continuation chart 10 day moving average resistance on Monday.
By Wednesday’s close, the July contract had gained .408 (11.4%) before closing at 3.989 until Friday due to a national holiday.
In Friday’s session, the July contract spiked up to a 4.148 morning high but couldn’t hold the gains before ending the day at 3.847. For the day, the July contract was down .142 or 3.6%. For the week, the July contract was up .226 or 7.4%.
A bearish outside range day formed on Friday’s bar which could point to a near term top being in place.
10 day moving average support is at 3.700 today with longer term 40 day moving average support at 3.530. The 40 day average held as weekly low support two weeks ago.
Friday’s 4.148 high is technically important as it coincided with the 61.8% resistance of the March-April downtrend at 4.120
If 4.120-4.148 resistance is broken, the 78% retracement at 4.450 will become the next area of resistance.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 57.12






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