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Daily Natural Gas Market Update 2-19-25

By: Heather Wine, Senior Risk Manager - Energy

Daily Natural Gas Market Update
 
Heather Wine
Senior Risk Manager | (312) 373-8250StoneX Financial Inc. - FCM Division Heather.Wine@stonex.com 
StoneX Value Matrix
image-20250219065500-3
Source: StoneX Value Matrix (2), Bloomberg
StoneX Commodity Indicator
image-20250219064709-1
 
Source:  StoneX Commodity Indicator (1), Bloomberg
Fundamentals & Weather

March NG continued its uptrend for a 7th straight session Tuesday, settling up 28.2 cents yesterday at $4.007.  Following early session weakness, gas prices spiked higher yesterday as arctic air spread across the central US, causing a ramp up in heating demand while threatening freeze offs. The recent demand surge is expected to be displayed in both tomorrow’s storage report and the subsequent 2 reports.

image 108458
Source: Bloomberg, CME

LNG exports are running at record levels this month, averaging 15.4 BCF/day. Feedgas demand hit 16.1 BCF/day yesterday and is estimated this morning at 16.3 BCF/day.   

The return of frigid temps is causing gas and oil wells to freeze off in parts of the US.  Daily production is estimated this morning at 102.2 BCF/day, down from the month to date avg of 104.9 BCF/day and the monthly high of 105.6 BCF/day. The Midcon region is experiencing the steepest decline in output with estimates down about 900 MMcf /day versus recent highs with output in the Permian down about 800 MMcf/day. Further declines are likely in the coming days as temps remain in the single digits with subzero lows.

 

image 108460​​​​
Source: Bloomberg

The extreme cold has boosted heating needs with res/comm usage estimated yesterday at 61.2 BCF/day.  Res/comm usage this morning is estimated at 60.6 BCF/day.  With temps expected to moderate later this weekend into next week, heating demand is expected to decline back into the mid to low 40 BCF/day range. Power burn is also coming in strong this morning, up 3.9 BCF/day at 44.2 BCF.  Total demand is estimated at 169.2 BCF/day, 26 BCF/day higher than Friday.

​​image 108459
Source: Bloomberg

A much larger than normal draw is expected for the week ended Feb 14 as a result of the surge in demand. Estimates are calling for a pull of 182 BCF which would outpace last year’s draw of 58 BCF and the 5 yr avg draw of 145 BCF. 

Spot month gas prices have jumped another 4.5% this morning, breaking thru $4, on supportive bullish fundamentals.

 

Technical Analysis

image-20250219065525-4
Source: Bloomberg, CME

Explosive price action in the natural gas market on Tuesday as the March 25 contract overcame early weakness to close the day sharply higher.

After trading .171 lower on Tuesday from Friday’s close, the March contract bottomed out at a 3.554 morning low holding just above 10 day moving average support.

Buyers came in on early weakness to rally the March contract to a 4.007 daily settle, up .282 (7.6%).  Volume came in at the 2nd highest level of 2025 registering 300,505 contracts.

The open gap at 4.000 was closed on Tuesday turning the 4.369 January high into the next area of resistance.

If 4.369 resistance is reached and broken, the November 2014 high at 4.544 will become the next upside objective.

4.000 is near term support followed by the 40 day moving average at 3.680.

Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish

Relative Strength Index -64.68

image 108455
Source: Bloomberg, CME
image 108454
Source: Bloomberg, CME
image 108456
Source: Bloomberg, CME
image-20250212132908-2
Source: Bloomberg, CME, StoneX Value Matrix (2)
image-20250212132720-1
Source: Bloomberg, CME, StoneX Value Matrix (2)
Forward Curve Pricing
image 108457
Source: Bloomberg, CME
 
Disclaimer

This material should be construed as the solicitation of an account, order, and/or services provided by the FCM Division of StoneX Financial Inc. (“SFI”) (NFA ID: 0476094) or StoneX Markets LLC (“SXM”) (NFA ID: 0449652) and represents the opinions and viewpoints of the author. It does not constitute an individualized recommendation or take into account the particular trading objectives, financial situations, or needs of individual customers. Additionally, this material should not be construed as research material. 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 the risks prior to trading. Past results are not necessarily indicative of future results. 
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