

Gas prices pushed higher Friday as the supply/demand balance tightened week over week with the market also focused on summer demand growth expectations of 4%. A rise in industrial and res/comm demand along with LNG exports are expected to drive demand higher this summer. The June contract settled 15.1 cents higher at $3.63. For the week, the spot month rose 51.6 cents, marking the first weekly gain since Mar 28.

Feedgas flows fell to 15.1 BCF/day on Friday as planned maintenance continues at the Cameron LNG terminal. One of 3 trains at Cameron LNG was taken offline on May 1 for scheduled maintenance, pushing overall feedgas demand lower. The terminal received about 1.5 BCF/day on Friday, down 0.7 BCF/day from pre-maintenance levels.
Feedgas demand reversed back up over the weekend but is back down this morning at 14.9 BCF/day.
The nat gas rig count rose by 2 rigs last week to 101 rigs while oil drilling rigs fell by 4ch is lower than the 10 and 30 yr norms.
Production is estimated this morning at 105.1 BCF/day. Output has averaged 104.8 BCF/day over the past 5 days. Platts estimates output will average 106.1 BCF/day over the next 7 days.

Mostly mild weather demand thru mid May is expected to support stronger than normal injections. There is potential for this month’s build to surpass the current record high of 494 BCF, set during May 2015.
Prices are trading a few cents higher this morning after hitting a high of $3.747 overnight.
Technical Analysis

The June 25 natural gas contract closed up 4 out of 5 days in last week’s trade settling Friday at 3.630. For the week, the contract was up .516 (16.6%) while closing up on a weekly basis for the 1st time in 4 weeks.
Prior to last week’s trade, the spot contract had closed down 5 out of 6 weeks and was technically oversold after reaching 3.000 support.
The trend at this point is neutral with mixed moving average alignment along with the short and long term trend following indicators.
40 day moving average resistance at 3.700 is being tested in today’s early trade. If broken, the 38% retracement of the recent downtrend at 3.795 will become the next upside objective followed by 4.000.
10 day moving average support is at 3.255 today followed by the 200 day average at 3.110. Longer term support is the 2.859 low set two weeks ago.
Moving Average Alignment – Neutral
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 55.44






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