

Following a 3 session rally, nat gas prices gave back some gains yesterday on profit taking and a boost in output. Weather models maintained expectations for seasonal temperatures this week and a return to hotter conditions late July into early August. The Aug contract settled 6.4 cents lower on the day at $2.187.

Wind generation has fallen this week to a near 3 year low, causing power generators to burn more nat gas for cooling demand. Wind farms are on pace to produce an average of just 4% of power generation this week, down from 7% last week and 12% so far this year.
Gas fired power plants are producing 48% of this week’s generation, up from last week’s 46% and this year’s average of 40%. While wind power does typically decline during summer, these are particularly low levels.
Weekly storage data is expected to show another supportive injection for the week ended July 19. Platts is calling for a build of 18 BCF while Reuters is predicting a build of 24 BCF. Either way, the number will undershoot the 5 yr avg injection of 31 BCF. Estimates however are higher than the previous week’s injection of 10 BCF as both power burn and LNG feedgas demand fell slightly week over week.
The week in progress is expected to show a larger build of about 46 BCF which would help narrow the surplus.

Prices tumbled early this morning and have since regained some of those losses. The move occurred after EQT confirmed its sales volumes for this year, indicating a further unwinding of supply curtailments. Reports included 180 BCF of net production curtailments with half of that occurring during the 2nd half of 2024.
Aug NG is currently trading 3 cents lower.

The August 24 natural gas contract turned back down in Tuesday’s session breaking back under 10 day moving average support to close the day at 2.187, down .064.
A potentially bearish inside range day was posted on Tuesday which will need lower trade today for confirmation.
With 10 day moving average support broken on Tuesday, the 2.015 low set last week becomes primary support. If 2.015 support is broken, the 78% retracement of the 2024 uptrend at 1.850 will become the next area of support.
10 day moving average resistance is at 2.180 today (2.170 current overnight high) followed by Monday’s 2.270 high.
Moving Average Alignment – Neutral- Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index -38.60






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