The spot month selloff continued yesterday despite a larger than normal storage injection. Prices added to daily losses immediately following the report with the day over day decline expanding throughout the session. The market remains focused on the upcoming warmer weather pattern and lower LNG exports which fell to a 1 year low this week. Feb futures settled Thursday’s trade down 17.3 cents at $2.697.
The EIA reported a withdrawal of 154 BCF for the week ended Jan 12. The draw came in 10 BCF shy of expectations but greatly exceeded last year’s pull of 68 BCF and the 5 yr avg pull of 126 BCF. Gas in storage totals 3.182 TCF, 350 BCF above last year and BCF above the 5 yr avg. The Midwest accounted for the largest pull for the week, coming in at 51 BCF, 9% higher than normal for the week.
Projections for the week in progress suggest a withdrawal of 368 for the week in progress which would be almost 2 ½ times larger than the 5 yr avg pull of 148 BCF.
Output levels are on the rebound after plunging this past week due to freeze offs and extreme cold. Production fell to 91.2 BCF/day on Jan 16 but has since risen back to 99.7 BCF/day as of this morning. Month to date, production is averaging 100.1 BCF/day, down 0.8 BCF/day from Jan 2023. The next 7 days should see output average 100.6 BCF/day.
The February 24 natural gas contract closed down for a 4th consecutive day this week as early strength failed under 10 day moving average resistance.
With resistance holding, the February contract sold off into the close ending the day at 2.697, down .173 (6%).
The February contract has lost .615 or 18.5% so far this week and is down again today breaking under a key area of support.
This support near the 2.650-2.660 level is both the 200 day moving average and trend line support beginning at the mid-December 2.235 low.
If weakness holds, 2.400 will become the next longer term support followed by the 2.235 December low.
If the February contract can close back over 2.650-2.660 support today, it may bring in short-covering early next week.
Moving Average Alignment – Neutral
Long Term Trend Following Index – Bullish
Short Term Trend Following Index – Bearish
Relative Strength Index – 43.56
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. Each factor is quantified by comparing data for the current period versus last year, versus the previous period, versus its history and versus the yearly average. This quantification is converted to a number and summed together. The sum of all factors are reweighted by the 4-year decile of its history. The 4-year deciles redistribute the StoneX Market Indicator to obtain an equal share between the bullish and the bearish signals. 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.
The StoneX Value Matrix provides a measure of historical value by analyzing 4 years historical price data distributed into 10 deciles. All of the years are weighted at 20% with the exception of the most recent year which is weighted at 40%. The prices are adjusted for inflation using the Producer Price Index (PPI).
Reproduction or use in any format without authorization is forbidden. © Copyright 2023. All rights reserved.
This material should be construed as the solicitation of an account, order, and/or services provided by the FCM Division of StoneX Financial Inc. (“SFI”) (NFA ID: 0476094) or StoneX Markets LLC (“SXM”) (NFA ID: 0449652) and represents the opinions and viewpoints of the author. It does not constitute an individualized recommendation or take into account the particular trading objectives, financial situations, or needs of individual customers. Additionally, this material should not be construed as research material. The trading of derivatives such as futures, options, and over-the-counter (OTC) products or “swaps” may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand the risks prior to trading. Past results are not necessarily indicative of future results.
All references to and discussion of OTC products or swaps are made solely on behalf of SXM. All references to futures and options on futures trading are made solely on behalf of SFI. SXM products are intended to be traded only by individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM.
SFI and SXM are not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Contact designated personnel from SFI or SXM for specific trading advice to meet your trading preferences.
Reproduction or use in any format without authorization is forbidden.
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI . StoneX is a trading name of StoneX Financial Ltd (“SFL”). SFL is registered in England and Wales, Company No. 5616586. SFL is authorized and regulated by the Financial Conduct Authority [FRN 446717] to provide to professional and eligible customers including: arrangement, execution and, where required, clearing derivative transactions in exchange traded futures and options. SFL is also authorised to engage in the arrangement and execution of transactions in certain OTC products, certain securities trading, precious metals trading and payment services to eligible customers. SFL is authorised & regulated by the Financial Conduct Authority under the Payment Services Regulations 2017 for the provision of payment services. SFL is a category 1 ring-dealing member of the London Metal Exchange. In addition SFL also engages in other physically delivered commodities business and other general business activities which are unregulated and not required to be authorised by the Financial Conduct Authority. StoneX Group Inc. acts as agent for SFL in New York with respect to its payments services business. StoneX APAC Pte. Ltd. acts as agent for SFL in Singapore with respect to its payments services business. ‘StoneX’ is the trade name used by StoneX Group Inc. and all its associated entities and subsidiaries.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. Past performance of any futures or option is not indicative of future success. Indicators are not a trading system and are not published as a specific trade recommendation. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
© 2024 StoneX Group Inc. All Rights Reserved.
Discover more insights
