

Spot month gas prices settled yesterday’s trade about unchanged as weather forecasts held steady. The Dec contract fell below the $3 level, causing buyers to step while helping pare losses. Dec futures ended the session up .001 at $3.043.

Taking into account the season’s first cold snap, storage levels likely declined by 43 BCF in the week ended November 29. This compares to last year’s draw of 81 BCF and the 5 yr avg draw of 47 BCF.
Early estimates for next week’s report covering the week in progress range from a withdrawal of 49 BCF to 187 BCF with an average decline of 138 BCF expected. Gas fired heating demand spiked to seasonal highs during Nov 30-Dec 2, averaging a record high for the period of 47.8 BCF/day. Res/comm usage is expected trend lower over the next week, averaging 38 BCF/day which is still above the 5 yr avg of 37.5 BCF/day.
LNG feedgas demand moderated from recent highs above 14 BCF/day over the past 2 days with levels coming in near 13.5 BCF/day. Given colder weather in Asia and Europe, LNG activity should remain a supportive factor. Feedgas demand is back up this morning, estimated at 14.5 BCF/day.

Prices are trading higher this morning as production levels are estimated at 102.7 BCF/day, down 0.8 BCF/day.
Total demand has also spiked higher by 12 BCF/day to 143.9 BCF/day. This stems from a 7.2 BCF/day surge in heating demand as well as increased power burn and LNG feedgas demand.

The January 25 natural gas contract is currently trading .060 trading near 3.100 after holding above key support on Wednesday.
The support which held was the former “breakout” resistance at the 3.000-3.020 which is now support with the January contract closing Wednesday at 3.043.
With support holding, the January contract should trend higher in retracement of the .550+ loss seen over the past week.
The 10 day moving average at 3.225 is near term resistance with longer term resistance at last week’s 3.563 high.
3.000-3.020 remains primary support. If broken, the 40 day moving average currently at 2.790 will become the next area of support.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 54.02






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