

Despite mostly unsupportive fundamentals, spot month futures saw a late day rally amid thinner volumes ahead of next week’s expiration. Late day support stemmed from reports that El Paso Nat Gas Co. issued a force majeure, further limiting flows west out of the Permian. Nov nat gas settled 3.1 cents higher at $2.342.

A seasonally light injection is expected in today’s report covering the week ended Oct 18. Stocks are expected to rise 60 BCF, which falls short of last year’s build of 81 BCF and the 5 yr avg build of 76 BCF. If the estimate is correct, stocks would rise to 3.765 TCF.
Storage levels are likely to surpass the 3.9 TCF level by the start of withdrawal season. Reflective of weather, the next 2 numbers are not super bullish with Platts estimating builds of 84 BCF and 66 BCF, respectively. This would push total stocks to 3.915 TCF as of Oct 31.
A jump of 6.2 BCF/day in heating demand has helped push the market higher this morning while a 1.9 BCF/day decline in power burn is helping offset some of this increase.
Additionally, NWS forecasts have turned much colder across the West into the Rockies as of this morning. Temps across the Interior West will avg below to well below normal while the East remains much above normal. Concern is that the colder readings will push eastward however there is currently no indication of that.

LNG feedgas demand remains depressed, coming in this morning at 12.3 BCF, down 0.4 BCF/day.
The spot month is currently trading higher more than 10 cents higher on the day.

The November 24 natural gas contract closed .031 higher on Wednesday settling at 2.342 while holding above 200 day moving average support on the daily continuation chart for a 4th consecutive day.
The November contract is up nearly .100 in today’s early trade as it tests 40 day moving average resistance at the 2.470 level.
A close above the 40 day average will turn the trend back up following a 3-week correction with 2.560-2.580 becoming the next area of resistance.
If 40 day moving average resistance holds, the primary trend will remain sideways to down with the 200 day moving average at 2.230 being near term support. Longer term support is the 78% retracement of the August-October uptrend at 2.120.
Bullish divergences on the 60-minute chart could be a signal of an upside breakout.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 47.24






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