

Spot month gas prices settled higher to start the week as forecasts turned warmer and production ramped up, negating the bearish impacts of Hurricane Beryl. Hurricane Beryl led to reduced feedgas and cooling demand yesterday, while causing widespread power outages across much of Texas. With mid July expected to see one of the hottest patterns on record, prices ended their 8 day losing streak. Aug futures settled 5.2 cents higher at $2.366.

Production levels have been on the rise as maintenance concludes and drillers bring more supply online to support higher cooling demand. The 7 day average shows output at 101.7 BCF/day with the month to date average at 101.3 BCF/day.
As a result of ramp downs related to Hurricane Beryl, output yesterday fell to 99.9 BCF/day and is estimated today at 98.3 BCF/day. Platts projects output will rise back up to an average of 101.5 BCF/day during the 8-14 day period.
Record heat in the West will continue this week while a hotter pattern emerges mid July across the entire country. Above normal conditions will become more widespread in coverage during the 6-10 day period with 73 CDDs expected, ranking 2nd hottest on record. CDDs will peak on July 15 with 15.7 CDDs forecast, ranking the 10th hottest day on record since 1950. Maxar’s outlook yesterday called for 209.9 CDDs over the next 15 days which would be a record for the period and compares to last year’s 185.6 CDDs for the same timeframe.

This morning’s outlook is slightly hotter across the East while the pattern will remain hot overall on a national basis.
Prices are climbing higher again this morning as expectations for strengthening demand due to hotter temps and recovering LNG demand provide support. Concerns over rising output though could temper upward momentum.

A bullish reversal in the natural gas market on Monday as the spot August 24 contract bottomed near 50% retracement support in early trade.
Buying into the close rallied the August contract to a 2.366 daily settle, up .047, on moderate volume of 162,309 contracts.
The August contract will need to clear several areas of resistance in order to turn the primary trend back higher.
The 200 day moving average on the daily continuation chart is the 1st area of resistance at 2.460. This is closely followed by the 10 day moving average at 2.510 and the 40 day average at 2.650.
The 50% retracement support of the 2024 uptrend at 2.320 remains primary support. If broken, the 61.8% retracement at 2.120 will become the next downside objective.
Moving Average Alignment – Neutral- Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 42.32






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