

Nat gas prices settled lower Thursday following storage data and expectations for major demand destruction in the SE due to Hurricane Helene. Helene rapidly intensified yesterday, making landfall late in the day as a category 4, the strongest hurricane to make landfall in the US this season. Reduced output led to the 11th consecutive below average injections last week, helping further diminish the storage surplus. Since March, the 5 yr avg surplus has narrowed by 445 BCF. The Oct contract went off the board at $2.585, down 5.2 cents while the Nov contract settled 6.4 cents lower at $2.753.

Storage data for the week ended Sep 20 showed an injection of 47 BCF into working gas along with a reclassification of 8 BCF of salt storage from working gas to base gas in the South Central region. Without that change, the implied flow for the week was 55 BCF, which was larger than expected.
Total gas in storage now stands at 3.492 TCF, 233 BCF, or 7%, above the 5 yr avg and 159 BCF, or 5%, above last year.
Storage models are calling for another bullish report for the week in progress. Estimates suggest a build of 60 BCF which compares to last year’s addition of 87 BCF and the 5 yr avg build of 98 BCF. Producers could begin to bring curtailed output back online in response to the shrinking surplus and the approaching heating season.
Helene did spare Gulf coast LNG plants which means feedgas demand should remain high. Feedgas demand is estimated this morning at 12.6 BCF/day with Platts projecting demand to rise to an average of more than 13 BCF/day over the next 2 weeks.
The storm has so far left about 4 million customers without power while shutting in about 20%, or 0.41 BCF/day of output in the GOM.

The remnants of Helene, now a tropical storm, are expected to move from the Georgia/South Carolina border into Tennessee and Kentucky over the weekend.
The new spot month Nov contract is currently trading 11 cents higher on the day with the market turning its focus back towards the quickly depleting storage surplus.

The new front month November 24 natural gas contract closed at 2.753 on Thursday .168 above the price of the expired October 24 creating a large open gap on the daily continuation chart.
The November contract closed above 61.8% retracement resistance at 2.650 on Thursday turning the 78% retracement at 2.860 into the next upside objective.
Trend line resistance drawn above two previous highs is near 3.000 and is longer term resistance.
2.650 is near term support followed by the daily continuation chart 10 day moving average currently at 2.510.
10, 40 and 200 day moving average alignment is now bullish.
Moving Average Alignment – Bullish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 71.41 (in overbought area)






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