

The spot month contract settled lower Friday as a more mild weather outlook overshadowed bullish storage data last week. Technical selling pressure added further downward momentum. Sep futures fell 7.4 cents to settle at $2.123.

Cooler temps this week across the NE are expected to pressure gas fired power burn down to late June lows. With NE temps projected to average 7 to 10 degrees lower than normal, regional power burn is projected to average 9.6 BCF/day Aug 20-25. This would be the lowest power burn level since late June and down from the month to date avg of 12 BCF/day.
Nationally, power burn is expected to fall to 43.7 BCF/day over the week before turning back up during the 11-15 day period, averaging 49.7 BCF/day.
Friday’s near term outlook showed a shedding of 1 CDD across all regions except for the South Central US. This follows a loss of several CDDs the prior few days. The South is still expected to be hot, resulting in strong cooling demand.
Today’s forecast trends hotter versus Friday across the Midwest with cooler changes across the Interior West. Above normal temps return to the Midwest during the 6-10 day period with warmer temps arriving in the East late in the period. Heat will also return to CA and the SW. Above normal readings continue across the East and West during the 11-15 day period while temps moderate across the Midwest.

Prices are pushing higher today on a tighter supply/demand balance. Warmer temps will make their way back into the West and Central US later this week with more widespread expected during the last full week of Aug.
Output fell 0.5 BCF/day over the weekend to 101.7 BCF/day and remains at that level this morning. This compares to Friday’s output level of 102.2 BCF/day.

The September 24 natural gas contract rallied up to a 2.301 high in last Thursday’s trade but sold off into Friday’s close ending the week at 2.123.
For the week, the contract was down .020 closing lower on a weekly basis for an 8th time in the past 10 weeks.
Prices have rebounded in today’s early trade after settling just above 10 day moving average support on Friday.
10 day moving average support is at 2.145 today followed by trend line support beginning at the 1.856 July low currently near 2.000. Longer term support is at 1.856.
Last week’s 2.301 high extending up to 2.350 (38% retracement of June-July downtrend) is primary resistance.
Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -49.96






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