

Spot month gas prices wiped out Monday’s 7% rally during yesterday’s trade with prices tanking on lower demand forecasts for the coming 2 weeks and the still massive overhang in storage. Estimates for Norwegian pipeline repairs to be completed by Friday also fed into yesterday’s selloff. Losses occurred despite output dropping to a near 5 month low. July futures settled 17 cents lower at $2.586.

Dry output fell yesterday to 98.6 BCF/day, according to Platts. Output has recovered 0.6 BCF/day as of this morning, with production coming in at 99.2 BCF/day. Output this month is averaging 3.5 BCF/day lower than Jun'23. Output is expected to average about 99.7 BCF/day over the next 2 weeks.
Weekly storage data is expected to show a 6th straight decline in the surplus as softer output and stronger weather demand limited gas available for injection last week. Estimates call for a build of 86 in the week ended May 31 which compares to last year’s build of 105 BCF and the 5 yr avg build of 103 BCF.
The surplus is expected to continue narrowing over the course of the month given expectations for rising gas fired power demand and the winding down of LNG terminal maintenance. A substantially smaller injection of 70 BCF is projected for the week ending June 7.

Prices are trading higher this morning following yesterday’s slide as hotter temps and stronger LNG demand overshadow pipeline maintenance/issues.
ANR Pipeline lifted a force majeure yesterday on pipeline flows through its Eunice Southbound location in Louisiana. Maintenance also began on Transco which cut volumes to Sabine Pass LNG. The maintenance is scheduled to last through early next week.
The next 5 days will see near record heat in the SW. Readings across the Midwest and SE will remain below normal thru mid June with hotter trends returning to the Midwest and East during the 11-15 day period.

The spot July 24 natural gas contract is currently trading .060 higher in today’s early trade following a steep sell off on Tuesday.
The sell off erased all of Monday’s gains as the July contract lost .170 (6.2%) on Tuesday to close the day at 2.586.
A bearish outside range day was also posted on another heavy volume session of 221,922 contracts.
Tuesday’s 2.573 low is near term support followed by the 200 day moving average at 2.450. The 200 day average held as support in last week’s trade.
If 200 day moving average support is reached and broken, the 38.1% retracement of the recent uptrend at 2.375 will become the next area of support.
Tuesday’s 2.829 high is near term resistance followed by the 2.924 high set two weeks ago.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index -58.77






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