Early session losses reversed after weekly storage data came in slightly lower than the average estimate while also cutting down the surplus. Feedgas flows at Freeport also began to ramp back up yesterday while producers say production curtailments underway would continue through fall. The October contract settled 4 cents higher on the day at $2.137.
For the week ended Aug 23, the EIA reported a build of 35 BCF, leaving total gas in storage at 3.334 TCF. The injection compared to last year’s build of 28 BCF and the 5 yr avg build of 43 BCF. As a result, the 5 yr avg surplus fell to 361 BCF. Over the past 5 weeks, the 5 yr avg surplus has fallen by a total of 143 BCF but still remains sizeable heading into shoulder season.
Heat this week in the Midcontinent and NE supported cooling needs with power burn rising to early Aug highs of 49.6 BCF/day. Supply/demand models indicate a build in the mid 20’s which compares to the 5 yr avg build of 51 BCF and last year’s build of 33 BCF.
Freeport resumed partial production yesterday following an outage on Wed that pushed flows there down to zero, leaving total feedgas demand at 11.4 BCF/day. LNG feedgas demand rose back up to 12.2 BCF/day yesterday and is up another 0.6 BCF/day today.
Golden Pass is requesting more time, until 2029, to finish the buildout of its gas export terminal, saying the 2026 deadline does not provide enough time to complete the construction. Work is currently 80% complete on the export project, with the first train 83% built, the 2nd train 46% complete while train 3 is 31% done.
Prices are trading lower but remain rangebound. Pressure is stemming from forecasts for fading demand over the next 2 weeks while maintenance events are keeping production below recent norms. Production could rise into the weekend however as patterns suggest higher flows into the end of the month.
Bullish price action in the natural gas market on Thursday as the new spot October 24 contract traded down to a 2.026 morning low. This closed much of the open gap between 2.000-2.090 created during expiration of the September contract on Wednesday.
Prices began to firm mid-morning and moved progressively higher into the close with the October contract settling at 2.137, up .040.
The October contract closed just above the 40 day moving average on the daily continuation chart. This turns the 200 day moving average at 2.270 into the next area of resistance.
A breakout above the 200 day moving average and the 2.301 high set two weeks ago will turn the trend back up.
2.000 is near term support followed by 1.856 which is the double bottom low set during the last two contract expirations. There is also a double bottom on the October 24 daily chart near 2.000.
Moving Average Alignment – Neutral-Bearish
Long Term Trend Following Index – Bullish
Short Term Trend Follow Following Index - Bullish
Relative Strength Index - 46.69
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