

Gas prices settled lower Wednesday as the market disregarded forecasts for strong cooling demand over the next few weeks, focusing instead on elevated supplies. An outlook from major producer EQT intensified ongoing oversupply worries that have plagued the market this year. Aug futures closed down 7 cents to settle at $2.117.

Despite 9 smaller than normal injections over the past 10 weeks, stocks still remain about 17% above average for this time of year. While EQT has brought online much of its supply curtailments this summer, it has put selective reductions in place and expects to continue that this fall. These “tactical curtailments” have occurred over the past several weeks and are likely to continue through shoulder season.
Today’s storage report is expected to show a smaller than normal build of 16 BCF for the week ended July 19 due to elevated power burn last week. The estimate compares to last year’s build of 23 BCF and the 5 yr avg build of 31 BCF. If correct, stocks would stand at 3.225 TCF, while the 5 yr avg surplus would decline to 16.2%. Early estimates for the week in progress suggest an above normal injection of 39 BCF.
This week has seen some LNG feedgas demand recovery as Freeport works towards returning to full capacity. Following yesterday’s close, feedgas volume to Freeport was revised lower, indicating a possible operational issue.

Spot month NG is trading a touch lower this morning prior to the EIA report as output levels are rising.

The August 24 natural gas contract traded lower for a 2nd day on Wednesday losing .070 to close the day at 2.117.
Volume was low at 65,013 contracts which could indicate waning selling momentum. However, volume tends to spike higher near the end of a trend.
Whether or not last week’s 2.015 low can hold as support will be an important technical test for the market.
If 2.015 support is broken, the 78% retracement support of the 2024 uptrend at 1.850 will become the next downside objective.
10 day moving average resistance is at 2.160 today followed by 2.270 weekly high resistance.
Moving Average Alignment – Neutral- Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index -37.81






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