

Weather outlooks fueled further bearish sentiment yesterday as the NWS is projecting a strong probability for above normal temps across nearly the entire Midwest and East Coast during the coming 6-10 day period. Nov futures settled Wednesday’s trade down 13.1 cents at $2.367.

Today’s storage report is expected to show stocks rose 77 BCF in the week ended Oct 11, which would leave total stocks at 3.706 TCF. The estimate falls short of both last year’s 93 BCF injection and the 5 yr avg injection of 89 BCF. The supply/demand balance loosened about 700 MMcf/day last week. Back to back hurricanes depressed power sector demand, which was partly offset by a seasonal uptick in res/comm demand.
For the week in progress, Platts is estimating a build of 68 BCF as colder temps this week have boosted res/comm usage to above normal levels.
Following this week’s cold spell, weather forecasts are pointing to much warmer conditions across a majority of the US next week. The NW corner of the US will however see colder than normal conditions. Some forecasters are saying this patch of cold air could move south and east. Current forecasts however are still showing the eastern ¾ of the country averaging warmer than normal. Any colder changes to the forecast however could spark a rally.

Prices are trading higher this morning in anticipation of another seasonally low storage build while overnight forecasts were mixed. Forecasters are monitoring 2 tropical systems in the Caribbean and Atlantic.
Power burn is estimated at 30.2 BCF/day, down 0.5 BCF from yesterday while output is estimated 100.5 BCF/day, up 0.5 BCF from yesterday. LNG feedgas demand remains strong at 14.2 BCF/day, down 0.1 BCF/day.

The November 24 natural gas contract broke out under another area of support on Wednesday keeping the market in a near term bearish downtrend.
The support broken at the 2.425-2.445 level was the 50% retracement support of the August-October uptrend and the 40 day moving average on the daily continuation chart.
The 61.8% retracement at 2.310 is the next area of support for the November contract followed by the 200 day moving average at 2.245.
2.425-2.445 is near term resistance followed by the 10 day moving average currently at 2.605.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 41.10






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