

Spot month gas prices climbed more than 3% during Friday’s trade, making a run back towards the $3 level. Stronger power burn across the Western US due to triple digit temps and much hotter conditions expected during the latter half of June supported Friday’s gain. Marking the 3rd straight higher close, July futures settled 9.7 cents higher at $2.918. For the week, July NG gained 13%.

Forecasts projecting a warming trend during the second half of June overshadowed last week’s bearish miss in storage expectations. Outlooks for late June trended hotter Friday in both the European and American models. Warmer readings currently dominating the West will quickly expand eastward into the Midwest and East. According to Maxar, above normal temps are projected to reach a larger portion of the US during both the 6-10 and 11-15 day periods.
Demand levels over the coming weeks will likely be strong enough to significantly reduce the surplus by the end of June. Some analysts say we could see the surplus narrow by 100 BCF.
Total demand is projected to average 95.8 BCF/day over the next week before rising to an average of 99.4 BCF/day during the 8-14 day period. Much of the increase is a result of stronger gas fired power demand. Power burn is coming in this morning at 36 BCF/day and is expected to reach an average of 42.3 BCF/day during the 8-14 day period.

Prices this morning have pushed thru $3 as this morning’s forecast is coming in hotter than Sunday’s outlook across the Midwest, SE and Mid-Atlantic while cooler from the SW to Texas. Heat is expected to build across the Midwest by this weekend, pushing highs into the mid 90’s. Heat shifts eastward late in the 6-10 day period.

The July 24 natural gas contract broke out above 7-month trend line resistance on Friday while closing up on a weekly basis for a 5 time out of the past 6 weeks.
The July contract closed .097 higher on Friday settling at 2.918 on heavy volume of 209,110 contracts. For the week, the contract was up .331 or 12.8%.
The trend remains up although 60-minute chart trend following indicators are in the area considered “overbought” which could indicate a near term pull back.
7-month trend line resistance broken on Friday is now primary support at 2.900 followed by the 10 day moving average currently at 2.715.
The final 88% retracement of the 2024 downtrend at 3.165 is the next upside objective. Longer term resistance is the 3.392 January 2024 high.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -69.70






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