

After jumping higher early in the week on pipeline issues in Canada, prices vacillated the remainder of the week on shifting weather outlooks and fluctuating LNG feedgas demand. With mild temps expected to give way to colder conditions across much of the US this week, losses were limited heading into the weekend. The spot month ended Friday’s session 0.5 cent lower at $1.752, down 1.8 cents week over week.

Demand levels plunged last week by more than 6.5 BCF/day to an average of 92.2 BCF/day. Res/comm usage accounted for 3.8 BCF/day of the decline given mild temperatures.
Prices are pushing higher this morning on rising heating demand while production is softer at about 98.3 BCF/day, down slightly from weekend levels of 99 BCF/day. Output is likely to fall further amid continued pipeline maintenance.
LNG feedgas demand has remained below capacity so far this month due to maintenance and repairs. Today’s estimates indicate that LNG feedgas has recovered from last week’s lows due to stronger demand at Sabine Pass, Corpus Christi and Freeport.
Several LNG projects under construction along the Gulf Coast are expected to boost US LNG export capacity from 14 BCF/day to about 25 BCF/day by the end of the decade. This has helped support contracts much further out on the curve.

The nag gas rig count fell by 3 rigs last week to 106 rigs. This is down 53 rigs from last year’s total of 159 rigs for the same timeframe.
We are likely to continue seeing randebound trade in the near term. Any further escalation of geopolitical tension in the Middle East could lead to some price volatility.

Natural gas prices have been locked in a fairly narrow .300 sideways range over the past three weeks with the spot May 24 contract alternating between 1.650 support and 1.950 resistance.
In last week’s trade, the May contract closed the week with a small .018 loss settling Friday at 1.770.
Prices are up slightly to begin today’s trade with the May contract testing 10 and 40 day moving average resistance at 1.765-1.770 today.
If moving average resistance is broken, 1.943 is the next area of resistance followed by the early-March 2.009 high.
1.640-1.650 is near term support followed by 1.481-1.511 weekly low support.
Moving Average Alignment – Neutral - Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -50.01






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