

Spot month gas prices closed lower to start the week as weather outlooks turned less supportive. Monday’s forecast for the coming 15 days shed 6.2 HDDs as warmth begins to encompass the Midwest to the East early on and from the South to the East by the end of next week. Warmer conditions will weigh on gas demand while boosting injections heading into cooling season. The April contract settled 6.6 cents lower at $3.914.

Gas fired heating demand is running below normal this month with res/comm usage averaging 28.2 BCF/day so far this month. This is about 2.8 BCF/day, or 9% lower than the 5 yr avg. Forecasts for the next 2 weeks indicate heating needs will decline further to about 21.8 BCF/day through the first week of April, which is 3.5 BCF/day lower than the 5 yr avg.
Muted demand suggests we will continue to see supply levels rise for the last 2 weeks of March. Supply/demand models indicate a build of 60 BCF for the week ended Mar 21 followed by an injection of 25 BCF for the week in progress. Builds of this magnitude would push stocks up to 1.782 TCF by the last week of March.
LNG feedgas demand has been very strong, averaging 15.7 BCF/day for the month so far. A temporary reduction of 1.6 BCF/day in feed gas deliveries was recorded yesterday however levels are back up this morning to 15.8 BCF/day. Yesterday’s decline occurred as Gulf South Pipeline Co released a notice that one of its pipelines delivering to the Freeport LNG terminal was struck by lightning.

Prices are holding near 3 week lows this morning, trading mixed so far as the expected return of Freeport LNG offsets forecasts for lower seasonal demand.
Technical Analysis

The April 25 natural gas contract closed .066 lower on Monday holding in a fairly narrow .150 daily range to settle the day at 3.914.
The 40 day moving average at 3.880 today has held as support the past two sessions and held again overnight with a current 3.885 low for the April contract.
A close under the 40 day average will turn the trend back down with the 38% retracement of the 2024-2025 uptrend at 3.380 becoming the next downside objective.
10 day moving average resistance is at 4.045 today. Longer term resistance is last week’s 4.259 high followed by the 4.901 high set two weeks ago.
Bearish divergences (new price high, lower index high) have formed on the short term trend following index and the daily RSI index. While not outright sell signals, these types of divergences tend to form near market highs.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 48.07






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