

Nat gas prices spiked higher Monday, rising 9% to a 5 week high as production remained depressed while weather outlooks turned cooler, suggesting stronger demand ahead. The Dec contract settled 25.1 cents higher at $2.92, leaving the Dec/Jan spread at just 21 cents, the lowest since Nov 2022.

Production has remained below the 100 BCF/day level for the past 3 days and is estimated this morning at 99.1 BCF/day. This is up 0.3 BCF/day from Monday and down from the month to date avg of 100 BCF/day. A small increase in GOM output was offset by losses in the south central region. Producers indicate that market signals will continue to be indicators of when and how much output comes back online.
Res/comm has spiked higher today, rising 4.6 BCF/day while power burn is down 0.6 BCF/day. LNG feedgas remains strong at 13.8 BCF/day. Total demand is estimated up 4.8 BCF/day at 108.4 BCF/day. Platts projects overall demand will continue to rise over the next 2 weeks, averaging more than 108 BCF/day over the next 7 days, increasing to 113.5 BCF/day during the 8-14 day period.

Prices came off slightly this morning following Monday’s rally however, the market has already turned back higher. Maxar says there is uncertainty in the 11-15 day forecast as the pattern remains unclear.

The December 24 natural gas contract gapped higher on Monday to begin the new week of trade rallying up to a 2.956 morning high before pulling back slightly into the close.
For the day, the December contract was up .251 (9.4%) closing at 2.920.
Volume was at a 5-month high of 252,383 contracts which could be indicative of a blow off top if prices begin to trend back down.
Yesterday’s high was technically important as it held under now four point trend line resistance beginning at the January 2024 high. As long as the spot contract holds under the 3.000 level, the trend will remain sideways to down.
A close above 3.000 would be a bullish signal turning the October 3.159 high into the next area of resistance.
10 day moving average support is at 2.755 today which coincides with the gap created on Monday’s open.
The 40 day moving average is following support at 2.615 with longer term 200 day moving average support at 2.225.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 59.58






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