

Spot month gas prices sank yesterday as mild weather forecasts suggested light weather demand through mid November while output levels ticked higher. The market is expecting this to result in higher than normal injections over the next few weeks. Additional pressured yesterday stemmed from a 6% tumble in crude oil as geopolitical risk eased. Today’s expiring November contract settled 25.1 cents lower at $2.309 while the December contract settled at $2.863.

LNG feedgas demand has shown signs of recovery after estimated back near 14 BCF/day over the weekend. The rebound is being aided by the winding down of maintenance season at both Cameron and Sabine Pass LNG. Activity at the other 5 LNG terminals also remains strong. Feedgas demand is expected to rise in the coming months as new export facilities come online. Both Plaquemines LNG and an expansion of Corpus Christi are expected to start producing LNG by the end of this year.
National demand is expected to be light during the final days of October into the first half of November as much of the southern and eastern US averages warmer to well above normal. The Midwest is currently experiencing near record warmth with highs in the 70’s and 80’s today and tomorrow. The warmth will spread eastward this week, before cooler temps move in. Res/comm usage this morning is down 4.8 BCF/day while power burn is up 0.3 BCF/day. This, along with other small changes, leaves total demand for today at 97 BCF/day.

Despite a drop in output, prices are extending losses this morning amid limited early season heating demand. Platts projects output has fallen 0.9 BCF/day today to 101.9 BCF.
The Nov contract is currently trading 4 cents lower while the Dec contract is down about a penny.

Today’s expiring November 24 natural gas contract was heavily sold on Monday to begin the new week of trade losing .251 (9.8%) to close the day at 2.342.
Volume was surprisingly low at only 89,409 contracts.
Overnight selling has dropped the contract to daily continuation chart 200 day moving average support at 2.220. The 200 day average held as support in last week’s trade.
If 2.220 support is broken, the 78% retracement of the August-October uptrend at 2.120 will become the next area of support.
The December contract which is currently trading 2.850, .600 above the price of the November contract. With the December contract becoming the spot contract tomorrow, it will create a massive gap on the daily continuation chart.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 39.80






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