

Defying expectations, the EIA reported an injection for last week, adding further pressure to yesterday's early losses. The early start to injection season helped improve the outlook for end of season storage levels. Apr futures settled with a 27.2 cent loss at $3.975.

LNG export demand is holding near historical highs, estimated at 16 BCF/day Thursday. Feedgas demand has ticked even higher this morning, to an estimated 16.6 BCF/day, driven by rising usage from the Corpus Christi and Plaquemines terminals.
Weather forecasts suggest cooler conditions over the Midwest and East while the West basks in much warmer than normal temps for the next 2 weeks. Demand projections show usage declining from today’s 109.2 BCF/day. Total demand for the next 7 days is estimated at 108.5 BCF/day while 8-14 day usage is estimated at 107.3 BCF/day.
Coming in 8 BCF higher than the average estimate, a build of 9 BCF was reported for the week ended March 14. The Midwest and East regions posted small withdrawals while a 28 BCF build in the South Central regions offset those declines. Stocks now stand at 1.707 TCF, 190 BCF below the 5 yr avg and 624 BCF below last year. Contributing to the injection was an 11 BCF/day drop in demand, led mostly by a 9 BCF/day decline in res/comm usage as well as strong wind and solar generation. Production was flat at 105.8 BCF/day.
Another bearish storage report is expected for the week in progress with calling for a build of 45 BCF/day. This compares to last year’s draw of 30 BCF and the 5 yr avg pull of 31 BCF.

Prices have traded mixed this morning with pressure stemming from bearish storage data and support from very strong LNG feedgas demand.
Technical Analysis

Wednesday’s rally higher by the April 25 natural gas contract failed to initiate follow though buying in Thursday’s session.
Instead, sellers used Wednesday’s rally to sell the April contract back down erasing all of the previous day’s gains to close the day at 3.975, down .272 (6.4%).
Volume was moderate at 185,932 contracts but was the highest volume for this week.
The April contract is currently near unchanged after trading down to 40 day moving average support at 3.875 in overnight trade (3.864 current low). A close under the 40 day moving average will turn the trend back down into typical post-winter seasonal weakness.
10 day moving average resistance is at 4.150 today followed by weekly high resistance at 4.259.
Funds were net long 297,383 contracts as of the 3/11 close. Fund liquidation could quickly become a negative factor if 40 day moving average support is broken.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 48.05






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