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Daily Natural Gas Market Update 3-6-26

By: Heather Wine, Senior Risk Manager - Energy

StoneX Value Matrix

image-20260306080352-1

ource: StoneX Value Matrix (2), Bloomberg

Fundamentals & Weather

A larger than expected storage withdrawal and firmer crude prices, which supported the broader energy complex, lifted spot month gas prices Thursday. Gains were partially tempered by warmer weather outlooks, which are expected to limit near term demand. The April contract settled 8.6 cents higher at $3.003.

Record challenging warmth is expected across much of the Eastern US over the next 5 days.  The 6-10 day outlook features an area of low pressure along the Northern Tier, pushing temps there below normal while the remainder of the US holds onto warmer than normal conditions.  The 11-15 day shifts colder across the NE, Mid Atlantic and Upper Great Lakes region. 

Source: NOAA

The EIA reported a larger than expected and larger than normal withdrawal of 132 BCF for the week ended Feb 27, leaving total gas in storage at 1.886 TCF.  Inventories now sit 115 BCF above last year and 43 BCF below the 5 yr avg.  The Midwest and East led the pull with draws of 44 BCF and 42 BCF, respectively.  

Softer demand this week points to a much smaller pull near 45 BCF, bearish vs both last year and the 5 yr avg withdrawals of 64 BCF. 

Season to date, stocks have declined 2.029 TCF, marking the 7th largest drawdown since 2010.

image 127621

Source: StoneX

Geopolitical risk tied to Iran continues to keep global LNG markets on edge, with shipping and supply concerns supporting EU and Asian  prices.  While those markets have eased from the sharp gains seen earlier this week, volatility remains amid intensified competition to replace lost Qatari cargoes. This will keep US LNG export demand firm.   

Domestic prices are trading higher this morning as the market weighs firm LNG demand, a widening storage deficit, and ongoing geopolitical risk against easing weather driven demand and strong production.

image 127622Source: StoneX

image-20260306080549-2

Source: Bloomberg, CME

The April 26 natural gas market has been trending in a sideways to higher range after posting a new 6-month low at 2.775 in last week’s trade.

A breakout attempt earlier this week above daily continuation chart 10-day moving average resistance reached a 3.188 high before failing.

In yesterday’s trade, the April contract rallied higher in late-day trade closing at 3.003, above the 10-day moving average and 3.000 resistance.

A post-winter seasonal low may be in place.  Tuesday’s 3.188 high is near term resistance followed by 3.253, a high set two weeks ago.  A breakout above 3.253 will turn the 200-day moving average at 3.575 into the next upside objective.

The 10-day moving average broken as resistance on Thursday is now support at 2.960.  If broken, weekly low support is at 2.867 followed by last week’s 2.775 low.

Moving Average Alignment - Neutral-Bearish

Long Term Trend Following Index – Bearish

Short Term Trend Follow Following Index - Bullish

Relative Strength Index -45.50

image 127613

Source: Bloomberg, CME

image 127612

Source: Bloomberg, CME

image 127611

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 127610

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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