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Daily Natural Gas Market Update 2-26-26

By: Heather Wine, Senior Risk Manager - Energy

StoneX Value Matrix

image-20260226083622-1

ource: StoneX Value Matrix (2), Bloomberg

Fundamentals & Weather

Spot month gas prices trended higher into expiration, supported by position squaring and solid export activity.  Gains however were capped by forecasts calling for softer near term weather demand.  Mar NG went off the board at $2.969, up 5.4 cents on the day while the new spot month Apr contract settled at $2.87. 

Apr NG is currently trading lower on expectations for a modest supply drawdown, rising output levels and forecasts for warmer conditions over the coming 2 weeks.

The Weather Desk has pulled out 40 HDDs for March, leaving their projection for the month at 560 HDDs.  This is slightly above last year’s total of 513 but lower than both the 10 and 30 yr norms. Above normal temps are expected across most of the US with colder risks in the Northern Tier.

Source: NOAA

Today’s storage report is expected to show a smaller than normal drawdown of 55 BCF for the week ended Feb 20.  This compares to last year’s draw of 252 BCF and the 5 yr avg draw of 168 BCF. If correct, stocks would fall to 2.015 TCF.  

Early estimates for the current week call for a draw of 125 BCF, higher than both last year’s pull of 106 BCF and the 5 yr avg pull of 96 BCF.  

image 127125

Source: StoneX

Feedgas flows have averaged 18.9 BCF/d this week, topping 19 BCF/d twice. Today’s demand is estimated at 18.8 BCF/d today with the 2 week average projected to hold near this level.  Flows are projected to hit new highs above 20 BCF/d in the coming months as Gulf Coast LNG capacity continues to expand. 

Production has pulled back this week, falling to 106.7 BCF/ on Tuesday amid colder weather in the NE.  Output is slowing recovering, estimated today at 107.8 BCF/d. 

image 127126Source: StoneX

image-20260226083645-2

Source: Bloomberg, CME

The new front month April 26 natural gas contract is down over 2.5% in today’s early trade breaking out under 2.890 support.

The next support levels are 2.770 followed by 2.660 which is the bottom of a gap on the April 26 chart created in mid-January.

Contract low support for the April contract is at 2.604 which is very near the 2025 spot contract low 2.622.

Current weakness is expected to be the final sell off before a post-winter 2026 seasonal low forms.
 

2.940-2.950 is near term resistance followed by daily continuation chart 10-day moving average resistance at 3.010.

Moving Average Alignment - Neutral-Bearish

Long Term Trend Following Index – Bearish

Short Term Trend Follow Following Index - Bearish

Relative Strength Index -38.47

image 127116

Source: Bloomberg, CME

image 127117

Source: Bloomberg, CME

image 127118

Source: Bloomberg, CME

image 126918

Source: Bloomberg, CME, StoneX Value Matrix (2)

image 126917

Source: Bloomberg, CME, StoneX Value Matrix (2)

Forward Curve Pricing

image 127119

Source: Bloomberg, CME

Disclaimer
(1)  The StoneX Commodity 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.  The StoneX Commodity 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.
(2) The StoneX Value Matrix provides a measure of historical value by analyzing historical price data distributed into 10 deciles. The prices are adjusted for inflation using the Producer Price Index (PPI) published by the U.S. Bureau of Labor Statistics.
 

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