

Nat gas prices settled lower for a 3rd straight day on Friday as weather models scaled back heat across the East. Climbing production levels added further pressure ahead of the weekend. The July contract settled 7.8 cents lower at $2.881.

Production levels are beginning to trend higher amid rising futures prices and extreme heat. Platts shows output has remained above 100 BCF/day since Jun 13, coming in this morning at 100.6 BCF/day. While output levels have trended higher, they still remain lower than year ago levels. Month to date, output is averaging 99.7 BCF/day, 2.5 BCF/day lower than Jun 2024.
The nat gas rig count held steady last week at 98 rigs.
LNG feedgas demand dropped to 12.5 BCF/day on Friday with much of the drop blamed on maintenance at Sabine Pass. Feedgas nominations fell there by 0.3 BCF/day. Cheniere has stated that this summer’s outages will be less impactful than last year. Feedgas demand fell to 12.2 BCF/day over the weekend but is back up this morning at 13.1 BCF/day.
New Fortress Energy expects to export the first LNG cargo in July from its Altamira terminal in Mexico. This is delayed from its previous target calling for shipments to begin this month.

Weather models began to shave off some heat midday Friday, with CDDs dropping by a few. This morning’s outlook is cooler than Sunday’s. The 6-10 day period will start with very hot conditions in the Midwest and East with highs peaking in the 90’s. We will see a reprieve in the heat mid period early next week. Steadily hot conditions favor the SW and Mountain West regions.
The balance of summer is currently trading about 10 cents lower as rising output and teetering LNG feedgas demand outweighs extreme heat.

The July 24 natural gas contract rallied up to a new 5-month high at 3.159 last Tuesday but sold off into Friday’s close ending the week at 2.881.
For the week, the July contract was down .037, closing lower on a weekly basis for only the 2nd time in the past 7 weeks.
The July contract closed Friday just over key support at the 2.860-2.880 level which is former 7-month trend line resistance, 10 day moving average support on the daily continuation chart and 60-minute chart trend line support beginning at the late-April low.
A close under 2.860-2.880 will turn the near term trend back down with 2.600 being the next area of support. Longer term 200 day moving average support is at 2.465 on the daily continuation chart.
Last week’s 3.159 high remains primary resistance.
Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index -56.08






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