

Spot month NG continued its descent yesterday even as a late bout of summer heat across the Plains and Midwest pushed demand levels up about 10 BCF day over day. The market was more focused on forecast changes over the weekend, showing cooler temps across the East Coast. With temps easing, injections are likely to begin rising. Sep futures settled 6.6 cents lower at $1.956.

Hot conditions are underway across major consuming regions, helping boost demand to very strong levels. Total consumption Monday shot higher as power burn rose 4.8 BCF/day while res/comm demand increased 4.1 BCF/day. Demand levels this morning are up another 0.8 BCF to 110.8 BCF/day.
Cooling needs will remain on the stronger side this week before seeing a significant drop next week as much of the North experiences shoulder season conditions. National demand is predicted to average 100 BCF/day during the 8-14 day period.
Output held steady yesterday despite talk that producers would be curtailing activity heading into shoulder season. Platts pegged output yesterday at 102.1 BCF/day while preliminary estimates for today show production rising 0.5 BCF to 102.6 BCF/day.
Healthy production levels have contributed to elevated storage levels this season. End of season storage estimates suggest stocks will head into winter at a 4 year high. Stocks are expected to conclude injection season with about 3.9 TCF/day in storage. This compares to last year’s 3.8 TCF and the 5 yr avg of 3.7 TCF.

Prices continue to ease this morning as forecasts underwent notably cooler changes overnight from the southern Plains to the Midwest and Mid-Atlantic. While the 6-10 day period starts off with above normal temps, cooler Canadian air will make its way into the Midwest and East later in the period, causing widespread cooler than normal conditions during the first week of Sep. Cooler trends will also emerge in Texas while above to much above normal temps encompass the West.

The spot September 24 natural gas contract which expires on Wednesday’s close has settled lower five consecutive sessions settling under that 2.000 level at 1.956 on Monday.
Volume has contracted sharply over the past two sessions coming in at just 50,432 contracts on Monday.
The July 1.856 low is primary support. This support coincides with the 78% retracement of the 2024 uptrend at 1.850.
A close under 1.850 will turn the final 88% retracement at 1.680 into the next downside objective.
The lower-2.000 level is near term resistance followed by the 10 day moving average currently at 2.110.
Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bearish
Relative Strength Index - 37.29






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