

Early bullish momentum on Friday fizzled out due to cooler outlooks for the start of September. Mostly neutral temperatures are forecast for the Midwest and East through the first half of the month while warm readings in the West and South are expected to moderate. Weaker demand expectations pushed Oct futures down a penny to settle at $2.127.

The nat gas rig count has been on the decline with drilling rigs down by 2 last week to a total of 95 rigs as of Aug 30. The current rig count is down 19 rigs, or 17%, from a year ago.
Production for the first few days of Sep has averaged 101.3 BCF/day, down from Friday’s 102.1 BCF/day. While these levels are still high, production curtailments could be the catalyst to turn the market back up.
Freeport has returned to service following last week’s unplanned outage. As of Friday, LNG feedgas rose to 13 BCF/day, 0.7 BCF/day higher than Thursday. Feedgas demand remained at or slightly above 13 BCF/day over the long weekend coming in this morning at 13 BCF/day.

Despite rising flows to export terminals, prices are trading lower this morning as forecasts continue to suggest low demand while the surplus remains about 12% higher than normal.

The new front month October 24 natural gas contract lost .043 in last week’s trade closing Friday at 2.127.
A bullish double bottom reversal may have formed in last week’s trade on both the daily continuation chart at the 1.856 level and the October 24 chart near the 2.000 level.
Whether or not these support levels can hold will be an important technical test for the market this week.
Bullish divergences have formed on the trend following oscillators which also suggest a low may be forming.
The daily continuation chart 200 day moving average resistance is at 2.265 today followed by 2.301 weekly high resistance set two weeks ago.
A breakout above both areas of resistance will turn the trend back higher.
10 day moving average support is at 2.060 today followed by 1.990-2.000. Longer term support is at 1.856, a low tested two times over the past month.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 50.27






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