

Nat gas ended a volatile trading week lower Friday following a 2 day rally that pushed spot month gas prices up nearly 30 cents. Friday’s decline was triggered by profit taking, robust production and milder weather forecasts. Additionally, an unplanned outage at the Freeport export terminal had also been resolved. Jan futures settled 17.5 cents lower at 3.28.

Nat gas output remained strong last week, coming in Friday at 104.3 BCF/day. Output maintained healthy levels over the weekend, averaging 103.7 BCF/day and is estimated this morning at 103.9 BCF/day. The 4 BCF/day curtailed output in the Marcellus and Haynesville shales appears to be back online. Month to date, output is averaging 103.5 BCF/day, 1.4 BCF/day lower than Dec 2023.
Feedgas flows at Plaquemines terminal surpassed 0.15 BCF/day Friday morning, which likely means the plant was pulling in enough fuel to run at least one block of its 2 liquefaction trains. According to Reuters, total gas flows hit an 11 month high of 14.9 BCF/day on Friday, up from the 7 day average of 14 BCF/day. Friday’s bump in LNG feedgas flows was also due to a bump in demand at Sabine Pass, which hit a 13 month high of 5.2 BCF/day.

Prices are trading lower this morning as weather outlooks for late December suggest rising temps. The 11-15 day outlook covering the last 5 days of December shows a warmer than normal pattern across the entire US. Much above normal readings will span from the Rockies to the East with strong above normal temps in the Midwest.
Prior to the warm up, a blast of strong cold will move into the eastern half of the country this weekend into early next week, leaving temps much below normal.

A bearish double top reversal may have formed in the natural gas market last week as the spot January 25 contract rallied up to a 3.559 high on Thursday.
This high came within a few ticks of the late-November 3.563 high setting up the potential double top.
After closing Friday at 3.280, up .204 or 6.6% for the week, the January contract is currently testing 10 day moving average support at 3.190.
Longer term support is at the 3.000 level which includes former trend line resistance and the 40 day moving average.
A close under 3.000 will trigger the double top reversal turning 2.450 into the downside measuring objective for completion of the double top.
3.559-3.563 remains primary resistance. If broken, the double top will be negated turning the November 2023 high at 3.630 into the next area of resistance.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 53.76






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