

Oct nat gas prices surged higher Monday on the potential for storm related production disruptions, pipeline issues and revised weather outlooks. Expectations for a continued narrowing of the storage surplus lent further strength. The Oct contract settled 17.9 cents higher at $2.613 while the Nov contract gained 13.5 cents to settle at $2.854.

The market got an early boost after NGPL declared a force majeure on eastbound gas flows in East Texas. Issues were discovered in its TexOK Zone that required immediate repairs. Reduced supply into Louisiana added to growing supply concerns.
The market has been closely monitoring a system in the Caribbean that is expected to reach hurricane status by Wednesday as it tracks over the northeast GOM. The storm’s current path should keep it away from LNG terminals, however production is likely to be impacted by platform shut ins.
Maintenance at Cove Point helped push overall feedgas demand to 12.1 BCF/day on Monday, down from the month to date average of 13.2 BCF/day. Feedgas flows for today are estimated at 11.7 BCF/day.
While cooling season is winding down, forecasts show CDDs outweighing HDDs over much of the next 2 weeks. Maxar’s 15 day outlook yesterday projected 69.4 CDDs, ranking 12th highest while 26.4 HDDs ranks as the lowest for the period.

Weather models this morning show Tropical Cyclone 9 reaching hurricane status in the next day as it tracks northwest into the southern Gulf. The system will then track north through the eastern Gulf, impacting Florida's Big Bend late Thursday or early Friday as a major hurricane.
The market is holding onto yesterday’s gains as the spot month is currently trading up about a penny.

The October 24 natural gas contract surged higher on Monday following Friday’s breakout above 2.400-2.410 resistance gaining .178 (7.3%) to close the day at 2.613, a near 3-month high.
Volume, however, was unimpressive coming in at 124,650 contracts, a 2-week low.
The 50% retracement resistance of the June-July downtrend at 2.500 was broken on Monday turning the 61.8% retracement at 2.650 into the next area of resistance.
2.650 resistance was reached overnight and held on the first test. If 2.650 resistance is broken, the 78% retracement at 2.860 will become the next upside objective.
2.500 is near term support followed by 2.400-2.410 which coincides with the 10 day moving average at 2.390.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 67.29






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