

Rebounding from Tuesday’s session, nat gas prices surged higher yesterday on expectations for a hefty storage withdrawal and another round of near term cold. Res/comm demand began to show signs of strengthening yesterday while LNG feedgas demand continued to hold strong. The Jan contract settled with a 21.5 cent gain at $3.378.

The season’s first triple digit draw is expected in today’s report as cold weather boosted total demand last week nearly 20 BCF/day from the previous week while production was relatively flat. Reuters increased its withdrawal estimate as of this morning to 165 BCF. This compares to last year’s draw of 72 BCF and the 5 yr avg draw of 71 BCF. If correct, stocks would fall to 3.774 TCF.
Another round of frigid temps this week across the Midwest is expected to result in another larger than normal storage withdrawal for the week in progress. Early estimates for next week’s report suggest a pull of 119 BCF which compares to last year’s draw of 78 BCF and the 5 yr avg draw of 92 BCF.
Consumption levels are on the rise, particularly across the res/comm sector as temps plunge across the central US. Heating demand spiked 8 BCF/day yesterday and is up another 11.1 BCF/day this morning at 52.5 BCF/day.
LNG feedgas demand is up 0.2 BCF/day at 13.8 BCF/day as LNG demand out of Europe remains strong. Total demand this morning is estimated at 146.3 BCF/day.

Early losses have fizzled with the spot month trading a few cents higher on the day.
Weather forecasts for the 6-10 day period are showing colder changes vs yesterday across the Midwest and to a lesser extent in the East. The 11-15 day outlook maintains projections for above normal conditions across much of the country while the East Coast averages below normal.

The January 25 natural gas contract traded sharply higher on Wednesday breaking out above 10 day moving average resistance in early trade.
By session’s close, the January contract had gained .215 (6.8%) closing the day at 3.378. Volume was at a 10-month high of 276,534 contracts.
The 3.563 high set two weeks ago followed closely by the November 2023 high at 3.630 remain primary resistance. A breakout above both area of resistance would be a very bullish technical signal for prices turning 3.990-4.000 into the next area of resistance.
If the trend turns back down, 10 day moving average support is at 3.195 today followed by 3.000-3.020.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 62.18






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