

After rising early on escalating tensions in the Middle East, prices pulled back despite scorching temps across the eastern US. Forecasts calling for a break in the heat next week helped ease bullish momentum. July nat gas settled 14.9 cents lower Monday at $3.698.

LNG feedgas demand was adjusted lower yesterday to 13.7 BCF/day but is back up at 15.1 BCF/day this morning as Sabine Pass continues to return from maintenance. Fluctuating levels at Corpus Christi was likely the reason behind yesterday’s revision.
Record breaking heat yesterday caused demand to surge across the central and eastern US. Increased cooling needs sent power burns in some portions of the East to all time highs. Power burn was estimated Monday at 48.9 BCF/day and is even stronger today, at 49.7 BCF/day, as heat continues across the NE. Total demand is down 1.4 BCF/day from Monday’s 108 BCF/day as res/comm demand is down 3.6 BCF/day. With heat backing off next week, total demand estimated to average 102.8 BCF/day over the next 2 weeks.

Prices are trading lower this morning as tensions ease in the Middle East while storms moving across the country this week should help bring readings back to more comfortable levels. Selling pressure ahead of this week’s expiration is adding further pressure.
Technical Analysis

The July 25 natural gas contract gapped higher by .100 on Monday to begin the new week of trade posting the daily high of 3.949 on the open.
From the opening high, the July contract was well sold into the close finishing the day at 3.698, down .149 (3.8%). Volume, however, was surprisingly low totaling just 102,698 contracts.
Daily continuation chart 10 day moving average support held on Monday but has been broken at 3.690 in today’s trade.
This turns the 40 day moving average at 3.540 into the next area of support. The 40 day average held as support two weeks ago near 3.450.
If 40 day average support is broken, 3.450 will become the next area of support followed by the 200 day moving average currently at 3.360.
If the 40 or 200 day moving average holds as support, the market will remain in a sideways to higher range.
The 10 day moving average is now near term resistance at 3.690 followed by Monday’s 3.949 high.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 51.52






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