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Daily Natural Gas Market Update 9-20-24

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 Value Matrix
image-20240920084547-1
Source: StoneX Value Matrix (2), Bloomberg
StoneX Market Indicator
image-20240920084611-2
Source:  StoneX Market Indicator (1), Bloomberg
Fundamentals & Weather

Last week’s injection came in a touch higher than expected but fell short of seasonal norms, helping narrow the surplus for a 10th consecutive week.  The market initially reacted with a push lower before regaining upward momentum into the afternoon.  Following an early session decline of more than 2%, the spot month contract settled 6.4 cents higher at $2.348.

 

image 100915
Source: Bloomberg, CME

The EIA reported a build of 58 BCF for the week ended Sep 13, narrowly exceeding estimates while bullish by historical comparisons.  Total gas in storage now stands at 3.445 TCF, 274 BCF, or just under 9%, above the 5 yr avg, and 194 BCF, or 6%, above last year.  

This week’s market balance has tightened amid stronger gas fired power demand and higher LNG feedgas flows. Struggling production levels and lower Canadian imports have further added to market tightness.  Storage models currently suggest a build between 53 and 58 BCF for the week ending Sep 20.  This compares to last year’s build of 82 BCF and the 5 yr avg build of 88 BCF.

image 100916​​​
Source: Bloomberg

Output levels have consistently come in below 100 BCF/day this week.  Including today’s estimate of 99.8 BCF/day, the 5 day average output level is 99.4 BCF/day.  

Platts projects output over the next 2 weeks will  average right around 100 BCF/day.  The average month to date output for Sep is currently at 100 BCF/day, down 3.8 BCF/day from Sep 2023.

​​image 100917
Source: NOAA

Feedgas flows to export terminals fell yesterday to 12.2 BCF/day, according to Platts.  This is down from 13 BCF/day early in the week.  The decline stems mostly from lower flows to Corpus Christi.  Cove Point LNG will go offline Friday for annual maintenance and will remain shut until Oct 10.  Matterhorn Pipeline should however begin to see a boost in supply.

Conditions in the Caribbean appear conducive to storm activity. The NHC is monitoring a cyclone that shows potential for tropical storm development in the GOM late next week.  

Technical Analysis 
 
image-20240920084720-3
Source: Bloomberg, CME

A bullish recovery in the natural gas market on Thursday after the October 24 contract held above 200 day moving average support on early weakness.

The October contract traded down to a 2.223 low on Thursday which was daily continuation chart 200 day moving average support.

With support holding, the trend reversed back higher into the close with the October contract settling the day at 2.348, up .064.

 2.400-2.410 remains “breakout” resistance for the October contract.  A close above this resistance 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 2.305 today followed by the 200 day average at 2.225.

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

Relative Strength Index -58.97

image 100532
Source: Bloomberg, CME
image 100530
Source: Bloomberg, CME
image 100531
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 100919
Source: Bloomberg, CME
 
Disclaimer

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