

Struggling to find direction, spot month gas prices reversed much of Tuesday's gains yesterday as fundamentals remain mixed. Signs that production is trending downward were offset by the lingering storage surplus while strong feedgas demand was met with easing weather related demand. Oct futures settled 5.8 cents lower Wednesday at $2.145.

Today’s storage report covering the week ended Aug 30 is expected to show stocks rose 27 BCF. This compares to last year’s injection of 33 BCF and the 5 yr avg injection of 51 BCF. If correct, supplies would rise to 3.361 TCF, 7.1% above last year and 11.1% above the 5 yr avg.
Early estimates for next week’s report suggest a build of about 49 BCF which would once again fall short of historical comparisons.
Analysts say storage levels are on track to end injection season at a 4 year high of 3.905 TCF. This compares to last year’s total of 3.809 TCF and the 5 yr avg total of 3.747 TCF.
Below normal temps will remain in place across the eastern US through the weekend while readings across the West continue on the hotter side of normal. This morning’s 6-10 day outlook from Maxar shows gradual warming trends from the Midwest to the East while cooler conditions emerge across the Interior West into the South.
The 11-15 day period should see widespread above normal readings, particularly in the Midwest. Readings will be closer to normal in the South and along the West Coast.
Forecasts suggest CDDs will decline next week while warmer conditions during mid to late Sep should eliminate early season heating demand. Early winter forecasts also remain unsupportive at this point.

Prices are moving higher this morning on expectations for a narrowing surplus.

The September 24 natural gas contract closed .058 lower on Wednesday settling at 2.145 after failing to clear 200 day moving average resistance at the 2.270 morning high.
The 40 day moving average at 2.110 today held as support on Wednesday and again in the overnight session.
Wednesday’s 2.270 high which coincides with the 200 day moving average at 2.255 today is near term resistance. This resistance is closely followed by 2.301 weekly high resistance set three weeks ago.
If 2.301 resistance is broken, the trend will turn back higher.
The 40 day moving average at 2.110 is near term support followed by the 10 day moving average at 2.065.
Trend following indicators have turned bullish with bullish divergences forming suggesting a low may be near.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 52.73






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