

Overlooking bearish fundamentals, natural gas prices settled higher for the first time in 4 sessions on Monday. Aside from concerns over possible storm activity in the Gulf, yesterday’s rally was mostly technical based following steep losses last week. The Dec contract settled 11.8 cents higher at $2.781.

Feedgas demand recovered yesterday after falling below 11 BCF/day over the weekend. As of this morning, feedgas demand is estimated at 13.9 BCF/day. Flows are expected to remain strong over the next 2 weeks, averaging about 13.5 BCF/day.
An unseasonably warm pattern continues across the East with highs expected to peak in the 70’s over the next few days. Below to much below normal readings will continue across the Interior West. Maxar is projecting the next 2 weeks will see the fewest HDDs on record. As of yesterday, their 15 day forecast projected 178 HDDs outpacing the record low of 185.4 HDDs back in 2016.

The market is bracing for storm activity in the GOM and awaiting the outcome of today’s presidential election.
Tropical cyclone 18 strengthened quickly yesterday into Tropical Storm Rafael. As of this morning, major energy companies are evacuating workers and securing offshore platforms. Rafael is currently 200 miles east southeast of Grand Caymen. Rafael is expected to make landfall tomorrow on Cuba as a hurricane. The system is then expected to move into the GOM but there is a large discrepancy among models regarding its track.

A bullish reversal in the natural gas market on Monday as the spot December contract held above 10 and 40 day moving average support at the 2.514 level on early weakness.
With support holding, prices reversed back higher into the close with the December contract finishing the day at 2.781, up .118 (4.5%). Volume was moderate at 201,168 contracts.
Yesterday’s rally followed a steep sell off last week which dropped the December contract lower by near 14% leaving the market technically oversold.
A bullish outside range day was set on the daily continuation chart which needs to be confirmed with higher trade today.
2.919 is last week’s high followed by trend line resistance drawn above three 2024 highs currently near 3.000. As long as the December contract holds under 3.000, the primary trend will remain sideways to down.
The 10 and 40 day moving averages at the lower-2.500 area remains primary support.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 58.72






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