Natural gas prices fell ahead of the weekend as near term weather patterns remain mild with inventory surpluses expected to increase over the next few weeks. Talk of a further delay in the start up of Golden Pass LNG added to the selloff. The Dec contract settled 4.4 cents lower at $2.663. Weakness extended into the winter strip, which fell below the $3 level, into 2026.
After reaching 21 BCF/day on Saturday, res/comm demand has declined to 17.2 BCF/day as of today. Power burn however has ticked higher, coming in this morning at 31.7 BCF/day, up 0.7 BCF/day.
This morning’s 6-10 day outlook from Maxar shows a record low HDD forecast as an anomalously warm outlook remains in place. Widespread much above normal temps are expected across the East, Midwest and South with a total of 52.4 HDDs expected. Cooler temps will remain in place across the West.
Feedgas flows have recovered to more than 13 BCF/day after declining last week amid unplanned maintenance at Freeport and Sabine Pass. Platts pegs feedgas demand at 13.2 BCF/day this morning, 2.4 BCF higher on the day.
The startup of Golden Pass could now fall into 2026, this follows the timeline pushback in August into late 2025. As for Plaquemines LNG, initial operations could be delayed into early 2025, leaving Corpus Christi’s stage 3 expansion the primary source of new demand this year.
The December contract has erased early session losses and is now trading higher on the day.
Activity is picking up in the tropics. Potential Tropical Cyclone 18 is a poorly organized system in the Caribbean but development is favorable over the next few days. The system is expected to track northwestward through the east central Gulf by the end of the week. The uncertainty of this system is giving the market some support.
After becoming the spot contract last Tuesday, the December 24 natural gas contract closed down the following three sessions into Friday’s close settling the week at 2.663.
For the week, the December contract was down .429 (13.9%) while also setting a new 2024 contract low.
Overnight selling dropped the December contract to daily continuation chart 10 and 40 day moving average support at the 2.520-2.540 area which held on the first test.
A close under 2.520 will turn the bottom of the gap created last week during expiration of the November 24 contract at 2.390 into the next area of support. Longer term support is the 200 day moving average at 2.220.
Last week’s 2.898 high is near term resistance followed by 3.000 which is trend line resistance drawn across three 2024 highs. As long as the December contract holds under 3.000, the primary trend will remain sideways to down.
Moving Average Alignment – Neutral
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 54.39
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