

Concerns about reduced gas demand due to the threat of an approaching hurricane caused prices to plummet yesterday. Tropical Storm Francine moved into the western Gulf of Mexico yesterday and is expected to strengthen into a hurricane within the next 2 days. The storm is expected to cause widespread power outages, reduce cooling demand and disrupt export activity along the Texas and Louisiana borders. The Oct contract finished Monday’s trade with a loss of10.5 cents to settle at $2.17.

Tropical storm Francine is expected to limit feed gas flows as it strengthens into a hurricane. There is also concern Calcasieu, Cameron and Sabine Pass LNG terminals in Louisiana, along with Freeport in TX could face damages from the approaching storm.
Francine will have an impact on gas fired power demand, especially if the storm takes a more westward track closer to the Texas Coast. Widespread, cooling rains will impact South Texas to Southern Mississippi.
The temperature outlook is mixed with the western US still contending with extreme heat this week while the eastern US is forecast to see comfortable readings between the upper 60’s and low 80’s. Warmer than normal conditions are forecast to dominate much of the US next week, keeping demand for heating and cooling on the lower side.

Prices have turned back up this morning as producers scale back output ahead of Francine’s landfall. Preliminary estimates peg output at 98.7 BCF/day this morning., down 2.4 BCF/day from Monday. The spot month is currently trading up about 3%.

The October 24 natural gas contract began the new week of trade on Monday with a sell off pulling back from 200 day moving average resistance to close the day at 2.170, down .105 (4.6%).
Prices have rebounded in today’s early trade after holding above 10 and 40 day moving average support in overnight trade.
200 day moving average resistance which held three times in last week’s trade is at 2.245 today.
The October 24 natural gas contract began the new week of trade on Monday with a sell off pulling back from 200 day moving average resistance to close the day at 2.170, down .105 (4.6%).
Prices have rebounded in today’s early trade after holding above 10 and 40 day moving average support in overnight trade.
200 day moving average resistance which held three times in last week’s trade is at 2.245 today.
Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 55.12






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