After closing at near 6 month lows on Tuesday, spot month prices recovered modestly yesterday on the possibility of a brief round of cold next week. Record LNG feedgas, limited heating demand and expectations for a bearish storage report kept the reversal limited. Jan NG settled 2.4 cents higher at $2.335.
Today’s storage report is expected to show a withdrawal of 54 BCF for the week ended Dec 8. This compares to last year’s draw of 46 BCF and the 5 yr avg draw of 81 BCF. If correct, stocks would fall to 3.665 TCF.
Early estimates for next week’s report suggest a pull between 80 and 90 BCF given the arrival of colder temps this week. A pull in this range would register larger than last year and smaller than the 5 yr avg.
Output is edging higher this morning, up 0.4 BCF/day at 104.6 BCF/day while demand is down 2.8 BCF/day at 127 BCF.
A later timeline for Golden Pass LNG is dragging down the premium of 2024-2025 gas contracts as expectations for an LNG demand surge are now being delayed to the first half of 2025 from the second half of 2024.
Natural gas prices are currently higher in today’s early trade following a late day rally on Wednesday which closed the spot January 24 contract higher by .024 to settle at 2.335.
60-minute chart trend line resistance beginning at the early-November 3.630 high is near the 2.520-2.530 area today. This should be a strong resistance area if reached keeping the market in a bearish downtrend.
Wednesday’s 2.235 low is near term support followed by 2.150 which is the final 88% retracement of the April-October uptrend. If 2.150 support is broken, 2.000 will become the next downside objective.
Daily RSI which was in the oversold area on Wednesday under the 30 level is now at 31.49.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index – Bearish
Relative Strength Index – 31.49
The trading of derivatives such as futures, options, and over-the-counter (OTC) products or “swaps” may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand those risks prior to trading. Past financial results are not necessarily indicative of future performance. All references to futures and options on futures trading are made solely on behalf of the FCM Division of StoneX Financial Inc., a member of the National Futures Association (“NFA”) and registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a futures commission merchant. All references to and discussion of OTC products or swaps are made solely on behalf of StoneX Markets, LLC (“SXM”), a member of the NFA and provisionally registered with the CFTC as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM.
This material should be construed as the solicitation of trading strategies and/or services provided by the FCM Division of StoneX Financial Inc., or SXM, as noted in this presentation.
Neither the FCM Division of StoneX Financial Inc. nor SXM is responsible for any redistribution of this material by third parties or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the opinions or viewpoints of the FCM Division of StoneX Financial Inc. or SXM.
All forecasting statements made within this material represent the opinions of the author unless otherwise noted. Factual information believed to reliable, was used to formulate these statements of opinion; but we cannot guarantee the accuracy and completeness of the information being relied upon. Accordingly, these statements do not necessarily reflect the viewpoints employed by the FCM Division of StoneX Financial Inc. or SXM. All forecasts of market conditions are inherently subjective and speculative, and actual results and subsequent forecasts may vary significantly from these forecasts. No assurance or guarantee is made that these forecasts will be achieved. Any examples given are provided for illustrative purposes only, and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples.
The StoneX Market Indicator provides an overall view of market sentiment for a commodity based on the quantification of fundamental, technical and historical market data related to that commodity. Each factor is quantified by comparing data for the current period versus last year, versus the previous period, versus its history and versus the yearly average. This quantification is converted to a number and summed together. The sum of all factors are reweighted by the 4-year decile of its history. The 4-year deciles redistribute the StoneX Market Indicator to obtain an equal share between the bullish and the bearish signals. The StoneX Market Indicator History graphically represents each day’s actual very bearish to very bullish signal. This history contains the sum of all factors, excluding weather forecasts
The StoneX Value Matrix provides a measure of historical value by analyzing 4 years historical price data distributed into 10 deciles. All of the years are weighted at 20% with the exception of the most recent year which is weighted at 40%. The prices are adjusted for inflation using the Producer Price Index (PPI).
This communication includes data and analytics supplied by Precipice Analytics. Stonex does not own, control, create, or author this data and has not independently verified its accuracy. Stonex does not endorse its use for anything other than informational purposes. You are advised that Precipice Analytics technology may be protected by intellectual property and other rights that prohibit the unauthorized use and dissemination of the information contained herein.
Reproduction or use in any format without authorization is forbidden. © Copyright 2023. All rights reserved.
