Nat gas prices settled higher Thursday, ending a 4 day losing streak. Prices had traded lower much of yesterday’s session as Milton left more than 3.4 million customers without power, depressing energy demand and prices while last week’s injection came in larger than expected. The Nov contract settled 1.5 cents higher at $2.675.
Consumption in the SE is expected to decline as the region recovers from the aftermath of Hurricane Milton. As of late yesterday, more than 3 million customers were without power. Southeast demand is forecast to fall below 16 BCF/day over the coming days, down from the month to date average of 18.6 BCF/day.
Power burn in the SE was estimated yesterday at 4.9 BCF/day, down 2.4 BCF/day, or 30%, from a week ago. Power has been returned to about 500,000 customers this morning.
Gas stocks rose 82 BCF in the week ended Oct 4, leaving total gas in storage at 3.629 TCF. The injection was 11 BCF higher than expected but still well below historical norms, causing the 5 yr avg surplus to narrow to 176 BCF, down from 190 BCF the week prior. The Midwest and East led with builds of 28 BCF and 27 BCF, respectively. Prolonged power outages following Helene and the recent start up of Matterhorn Express drove the increased injections.
Estimates for the week ending Oct 11 range from 68 BCF to 77 BCF, which would fall short of the 5 yr avg build of 89 BCF.
Prices are currently lower after trading higher early this morning as the market turned it focus toward cooler weather next week across the central and eastern US. National demand is expected to rise as lows are forecast to dip into the 20’s.
Thursday finally saw a higher close, albeit a small change from the previous day. The November contract settled up .015 cents at $2.675. After early weakness saw the futures contract trade all the way down to $2.588, prices clawed back throughout the rest of the day.
Short-term momentum indicators were oversold on the .40 cent break this week so a relief rally is not unexpected. The key for a resumption of the uptrend will be whether today’s close can top $2.680 - $2.700 range. This is important technical resistance as the 40-day moving average is at $2.680 and resistance at the 62% retracement of the recent November move is also at $2.700. Support now sits at Thursday’s low right below $2.600.
After today’s close, we will see another update on spec long positions. As of last Friday’s report, they held over 95,000 long contracts. It will be interesting to see if the big break this week led to a big reduction in that position. The RSI has moved back into Neutral range.
Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 47.32
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