

The spot month nat gas contract pushed higher on Thursday as forecasts showed a continuation of substantially cold conditions into late January. support continues to stem from expectations for storage levels to decline by more than 600 BCF over the next 3 reports, which would wipe out the 5 yr avg surplus. Output disruptions from freeze offs appeared to stabilize yesterday, helping limit the upside. Feb futures settled 5 cents higher at $3.701.

Maxar shows the Midwest trending colder next week as a system moves through, leaving temps at much and strongly below normal levels in its wake. Lows are expected to fall into single digits with some cities registering below 0. While the cold pattern will remain in place, there will be a brief round of warmth late in the 6-10 day period. This will be followed by yet another round of cold during the 11-15 day period.
Exports remain at strong levels after setting highs early in the new year amid strong European demand. Feedgas demand levels were estimated yesterday at 15.3 BCF/day and are even stronger this morning, coming in at 15.5 BCF/day. Month to date, feedgas demand is averaging 14.9 BCF/day, up 0.2 BCF from Jan 2024.
Total demand has slipped 7.7 BCF/day to 151.7 BCF/day as of this morning. The decline stems from a 4 BCF/day drop in res/comm usage and 2.8 BCF/day drop in power burn.

Forecasts turned colder overnight with American models trending 16 HDDs colder. Maxar’s 11-15 day outlook features strong below normal temps across parts of the Rockies and Plains early in the period and much below normal readings from the Midwest to the East during the 2nd half of the period. There is some talk this cold pattern could break down over the weekend. If that occurs, prices would likely fall heading into next week’s trade. Demand levels are also
Technical Analysis

The February 25 natural gas contract was finally able to close above 10 day moving average resistance on Thursday renewing the bullish uptrend.
The February contract had been holding under 10 day moving average resistance for the previous four sessions but rallied above it to a 3.701 close on Thursday.
4.000 is the next resistance for the February contract followed by last week’s 4.201 high. A breakout above 4.201 will turn the November 2014 high at 4.544 into the next area of resistance.
The 10 day moving average broken as resistance on Thursday is now the first area of support today at 3.645 with longer term support at the 3.330 weekly low.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 58.71






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