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Daily Natural Gas Market Update 9-18-24

By: Heather Wine, Senior Risk Manager - Energy

Daily Natural Gas Market Update
 
Heather Wine
Senior Risk Manager | (312) 373-8250StoneX Financial Inc. - FCM Division Heather.Wine@stonex.com
StoneX Market Indicator
image-20240918083926-4
Source:  StoneX Market Indicator (1), Bloomberg
Fundamentals & Weather

Early session gains yesterday faded into the afternoon as the market lacked support needed to sustain upward momentum. Prices traded at more than 2 month highs, breaking out above the $2.40 level before reversing back down. Oct futures settled 4.9 cents lower at $2.324. 

 

image 100839
Source: Bloomberg, CME

The storage surplus likely narrowed again last week as declines in demand continued to outpace production cuts.  US consumption fell 2.8 BCF/day, led by a drop in gas fired power demand while changes in other sectors offset one another. Production fell by 500 MMcf/day due mostly to storm related shut ins while imports from Mexico were also lower on the week.  

Platts is calling for a build of 55 BCF for the week ended Sep 13, which compares to last year’s build of 62 BCF and the 5 yr avg build of 80 BCF.

image 100840​​​
Source: Bloomberg

Prices are recovering this morning as production struggles to recover..  Output over the past 6 days has averaged 99.7 BCF/day and is projected at 98.3 BCF for today.  This is down 0.5 BCF/day from Tuesday.  Platts is not expecting much change to output over the next week with an average of 99.8 BCF/day projected. 

​​image 100841
Source: NOAA

Near term weather forecasts suggest a lack of demand over the next few weeks.  Early season heating degree days will be limited with the northern US expected to see comfortable conditions for the remainder of September.  Cooling degree days will remain elevated through the end of the month before declining to much lower levels heading into October.  

Technical Analysis 
 
image-20240918084125-5
Source: Bloomberg, CME

The October 24 natural gas contract briefly broke out above 2.400-2.410 resistance on Tuesday reaching a 2.436 morning high.

Early strength failed to hold as prices sunk lower into the close with the October contract ending the day at 2.324, down .049.

The October contract held above 10 day moving average support on Tuesday keeping the market in a near term bullish uptrend.

2.400-2.410 remains primary resistance.  A close over this level will turn the 50% retracement of the June-July downtrend at 2.500 into the next area of resistance.

10 day moving average support is at 2.290 today followed by the 200 day moving average at 2.230.

Moving Average Alignment – Neutral-Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish

Relative Strength Index -58.80

image 100774
Source: Bloomberg, CME
image 100772
Source: Bloomberg, CME
image 100773
Source: Bloomberg, CME
image 99753
Source: Bloomberg, CME, StoneX Value Matrix (2)
image 99754
Source: Bloomberg, CME, StoneX Value Matrix (2)
Forward Curve Pricing
image 100843
Source: Bloomberg, CME
 
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(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.

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3. VALUE MATRIX DISCLAIMER: 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.


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