

Prices pushed higher Wednesday as forecasts for record heat propelled the spot month back above $3. Strong to very strong demand is expected over the next 2 weeks as a hot pattern emerges over much of the eastern 2/3. The July contract surged 22.3 cents to settle at $3.129.

After falling yesterday to 12.7 BCF/day, LNG feedgas demand is back up this morning at an estimated 13.2 BCF/day.
US LNG is currently at the widest discount to JKM since January as freight rates from the Gulf Coast to Asia are at their highest levels since mid-January. An increase in the number of US cargoes being exported to South Asia have helped tighten the market.
Output levels recorded a steep day over day drop yesterday on reduced capacity in the Appalachian Basin due to a scheduled outage at Transco’s compressor station in Maryland. Production levels fell to 98.9 BCF/day according to Platts. A recovery of 0.4 BCF/day is estimated by Platts, pushing output to 99.3 BCF/day. Output is expected to remain subdued heading into mid to late June.
Gas available for storage during the first week of June was limited by intense heat across the West. Gas fired power demand soared more than 3 BCF/day last week which was partly offset by lower res/comm demand and weaker exports to Mexico. Additionally, production fell by about 800 MMcfd/day. Platts is calling for a build of 76 BCF which would fall short of the 5 yr avg by 13 BCF while undershooting last year’s build by 14 BCF.

Consecutively smaller builds are expected into late June as summer heat builds across the US. Projections for next week’s storage report covering the week ending June 14 suggest a build of 68 BCF. This compares to the 5 yr avg build of 83 BCF and the year ago build of 92 BCF.
Prices are pulling back slightly this morning however the market is still very much focused on the heat wave that is about to make its way eastward across the US.

Another leg up in the natural gas market on Tuesday as the spot July 24 natural gas contract rallied up to a new 5-month high at 3.159 before closing the day at 3.129, up .223 (7.7%).
Volume was heavy for a 7th consecutive day at 227,818 contracts.
Yesterday’s high is technically important as it came at the final 88% retracement of the 2024 downtrend.
If 3.159 resistance is broken, the January 2024 high at 3.390 is the next area of resistance.
Bearish divergences continue to form on the 60-minute chart trend following oscillators warning that a near term top may be forming.
Former trend line resistance broken last week which held on Monday’s sell off is at the 2.880-2.900 level and is near term support.
10 day moving average support is at 2.810 with longer term 200 day moving average support at 2.460.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -68.46






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