

The nat gas market rallied Tuesday on short covering after closing down 9 of the past 10 sessions prior to yesterday. A recovery in equity markets helped spur further upward momentum as did signs of lower output. Sep futures settled 6.8 cents higher at $2.01.

Heat, along with elevated gas fired demand last week, are expected to result in another lower than normal injection for the week ended Aug 2. Platts is calling for a build of 27 BCF while Reuters is projecting a30 BCF injection. This compares to last year’s build of 25 BCF and the 5 yr avg build of 38 BCF. Next week’s report is also expected to be supportive with estimates calling for a build of 18 BCF, 25 BCF lower than the 5 yr avg. Including tomorrow’s report, 14 weeks remain in the traditional injection season.
Output fell yesterday by nearly 2 BCF/day to 101.1 BCF/day, down from Monday’s 102.9 BCF/day. Production is up slightly this morning at 101.4 BCF/day. Maintenance this week across the Permian and NE has kept output restrained.
With prices tumbling about 40% over the past 2 months, several major producers are preparing to curtail production and defer well completions during Q3 and possibly into Q4. According to the EIA’s August short term outlook, production this year will average 103.3 BCF/day, down from July’s estimate of 103.5 BCF/day and last year’s level of 103.8 BCF/day.

The rally continues this morning with spot month prices trading about 4% higher on the day. Bargain buying, reduced output and the possibility of another bullish storage report are all contributing to upward momentum.

The September 24 natural gas contract was up .068 on Tuesday closing at 2.010, just under daily continuation chart 10 day moving average resistance.
Early buying today has rallied the September contract above the 10 day moving average at 2.010 today.
Since the June high set nearly two months ago, there have only been two daily settles above this average. In both instances, the trend turned back down the following session.
If today’s breakout holds, the near term trend may have turned back higher in a seasonal rally.
Last week’s 2.149 high is the next area of resistance followed by the 2.270 high set two weeks ago.
The 10 day moving average at 2.010 is now near term support followed by 1.850, the 78% retracement support of the 2024 uptrend tested last week.
Moving Average Alignment – Neutral- Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index -45.65






This material should be construed as the solicitation of an account, order, and/or services provided by the FCM Division of StoneX Financial Inc. (“SFI”) (NFA ID: 0476094) or StoneX Markets LLC (“SXM”) (NFA ID: 0449652) and represents the opinions and viewpoints of the author. It does not constitute an individualized recommendation or take into account the particular trading objectives, financial situations, or needs of individual customers. Additionally, this material should not be construed as research material. The trading of derivatives such as futures, options, and over-the-counter (OTC) products or “swaps” may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand the risks prior to trading. Past results are not necessarily indicative of future results.
All references to and discussion of OTC products or swaps are made solely on behalf of SXM. All references to futures and options on futures trading are made solely on behalf of SFI. SXM products are intended to be traded only by individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM.
SFI and SXM are not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Contact designated personnel from SFI or SXM for specific trading advice to meet your trading preferences.
(1) The StoneX Market Indicator provides an overall view of market sentiment for a commodity based on the quantification of fundamental, technical and historical market data related to that commodity. The StoneX Market Indicator History graphically represents each day’s actual very bearish to very bullish signal. This history contains the sum of all factors, excluding weather forecasts.
(2) The StoneX Value Matrix provides a measure of historical value by analyzing historical price data distributed into 10 deciles. The prices are adjusted for inflation using the Producer Price Index (PPI) published by the U.S. Bureau of Labor Statistics.
Reproduction or use in any format without authorization is forbidden. © Copyright 2024. All rights reserved.




