

The rally in natural gas continued for a 4th straight session on Friday as maintenance continued to curb output while the market remains oversupplied . Short covering and bargain buying were also supportive last week. Sep futures settled 1.6 cents higher on the day at $2.143.

Gas output has declined as producers scale back activity to balance the market and stabilize prices. Additionally, several maintenance projects are further contributing to the reduced production levels. Platts shows output rose back to 102 BCF/day over the weekend with estimates for today at 102.2 BCF/day. The month to date average is 102.3 BCF/day, 0.8 BCF/day lower than last year.
A return to summer heat is on the horizon following a bout of mild conditions across the Midwest and East. Forecasts for the 2nd half of August show above average readings across the Rockies, Central, SE and NE portions of the US. The west coast will average lower than normal while portions of the South and Mid-Atlantic regions will see normal to below normal readings.
Maxar is projecting a total of 158.7 CDDs over the next 15 days. This falls between the 10 and 30 yr norms but is cooler when compared to last year, which ranked 2nd hottest. A loss of 2.2 CDD were noted over the weekend.

LNG feedgas demand extended past 13 BCF/day over the weekend but is coming in lower today at 12.7 BCF/day.
The market is extending gains this morning on more favorable weather forecasts for the coming 2 weeks. Another supportive storage report is expected for the week ended Aug 9 with estimates ranging from a 19 BCF build to an 8 BCF withdrawal.

The trend for the September 24 natural gas contract turned back higher last week after breaking out above 10 day moving average and lower-2.000 resistance.
Daily settle for the September contract on Friday came in at 2.143. For the week, the contract was up .176 (8.9%) ,closing up on a weekly basis for only the 2nd time in 9 weeks.
The 2.270 high set two weeks ago is the next area of resistance followed by the 40 day moving average at 2.315 and the 200 day average at 2.350.
The 200 day moving average at 2.350 coincides with the 38% retracement of the 8-week downtrend and will be an important resistance area if reached.
Daily continuation chart 10 day moving average support is at 2.065 today with longer term support at the 1.856 weekly low set two weeks ago.
Moving Average Alignment – Neutral- Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -52.33






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