

April nat gas posted a slight decline Thursday as it debuted as the new front month contract. The decline occurred despite last week’s withdrawal tying for the 10th largest pull on record and record flows to LNG export plants. Further pressure stemmed winter weather winding down while production continued its uptrend. April NG settled 2.5 cents lower at $3.934.

Last week’s storage withdrawal came in slightly below the avg estimate at 261 BCF but was still considered bullish based on historical comparisons. The number was 120 BCF larger than the 5 yr avg and 175 BCF larger than last year. The South Central region led with a draw of 111 BCF, followed by a 70 BCF in the Midwest. Gas in storage as of Feb 21 stands at 1.84 TCF, or 238 BCF below the 5 yr avg and 561 BCF below last year.
This week’s supply/demand balance has significantly loosened from last week, with res/comm demand down 34 BCF/day while production has rebounded nearly 3 BCF/day. Estimates for next week’s report suggest another above normal draw in the 100 to 115 BCF range.
Production has been steadily increasing since Monday’s level of 104.4 BCF/day, rising just under 2 BCF/day to this morning’s estimate of 106.2 BCF/day.
Expand Energy, the largest US gas E&P company, said it plans to add 600 MMcf/day by the end of March. By the end of March, Expand Energy’s output is expected to reach 7 BCF/day. The expansion could help boost injections this summer.

Moving past yesterday’s massive draw, the market is trading lower this morning with rising output and lower demand in the spotlight. With weather forecasts for the next 2 weeks showing a mostly warmer pattern overall , storage withdrawals should also begin to taper off.
Technical Analysis

The April 24 natural gas contract closed .028 higher on Thursday settling at 3.934 but bearishly closed under the 10 day moving average for a 2nd day.
Price have been gradually weakening from last week’s 4.476 high and may be ready to turn back lower into typical post-winter seasonal weakness.
Weekly low support is at 3.860 followed by the 40 day moving average at 3.730. A close under the 40 day average will turn the trend back down.
If 3.730 support is reached and broken, the 38% retracement of the 2024-2025 uptrend at 3.330 will become the next area of support for the April contract followed by 2.990-3.000.
The 10 day moving average is now near term resistance at 4.030 followed by 4.212 weekly high resistance.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -53.09






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