

Another volatile trading day on Friday ultimately ended with the spot month contract settling a touch lower. Prices surged 18 cents mid-morning on record LNG exports and strong summer demand expectations. The gains however failed to hold on a looser supply/demand balance with output running above year ago levels. Underlying pressure continues amid concern the trade war will reduce economic activity and demand for global energy. May futures settled 3 cents lower at $3.527, marking an 8% decline week over week.

Production levels have been running about 4 BCF/day higher than last year, averaging 105.4 BCF/day so far this month. Output on Friday was estimated at 106 BCF/day, up nearly 2 BCF/day from levels earlier in the week. Output has been fluctuating on spring pipeline maintenance. Production is estimated this morning at 105.5 BCF/day.
Oil drilling rigs fell by 9 last week while gas drilling rigs rose by 1. The combined rig count is down 6% from last year. Given the 14% decline in crude prices over the past week, energy firms could further cut back on oil drilling, which would, in turn, reduce associated gas production.
Record LNG flows and forecasts for higher demand are pushing prices higher this morning. LNG exports have risen to a monthly average of 16.2 BCF/day which is 3.9 BCF/day higher than a year ago and higher than March’s average of 15.8 BCF/day. Feedgas demand is estimated this morning at 16.7 BCF/day and is projected to remain at this level over the coming 2 weeks.

Prices are currently trading mixed.
Technical Analysis

The May 25 natural gas contract lost .310 (8.1%) in last week’s trade closing Friday at 3.527, a 2-month low.
The May contract has closed down two consecutive weeks bottoming last week at 3.336 which coincides with the 38% retracement support of the 2024-2025 uptrend at 3.380.
If 3.336 support is broken, the 50% retracement at 3.015 will become the next downside objective. This support was former resistance broken last year. It is also near the 200 day moving average on the daily continuation chart at 3.045.
Former support broken last week at 3.680 is now near term resistance followed by the 10 day moving average currently at 3.755.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 41.93






This material should be construed as the solicitation of an account, order, and/or services provided by the FCM Division of StoneX Financial Inc. (“SFI”) (NFA ID: 0476094) or StoneX Markets LLC (“SXM”) (NFA ID: 0449652) and represents the opinions and viewpoints of the author. It does not constitute an individualized recommendation or take into account the particular trading objectives, financial situations, or needs of individual customers. Additionally, this material should not be construed as research material. The trading of derivatives such as futures, options, and over-the-counter (OTC) products or “swaps” may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand the risks prior to trading. Past results are not necessarily indicative of future results.
All references to and discussion of OTC products or swaps are made solely on behalf of SXM. All references to futures and options on futures trading are made solely on behalf of SFI. SXM products are intended to be traded only by individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM.
SFI and SXM are not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Contact designated personnel from SFI or SXM for specific trading advice to meet your trading preferences.
(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.
Reproduction or use in any format without authorization is forbidden. © Copyright 2024. All rights reserved.


