November Gas Is Holding $3.00, but the Bid Is Thin
November natural gas futures opened the week fighting to stay above $3.00. The contract dipped just under the round number early Monday and bounced, but the bounce didn’t change the larger problem. National demand is still too light for buyers to get aggressive during the October shoulder season.
At 12:08 GMT, November natural gas futures are trading at $3.049, up $0.014 or +0.46%. The contract opened at $3.019, reached $3.068 and bottomed at $2.999.
Heat Out West and a Chill Up North Still Add Up to Mild
California’s giving the bulls something. Parts of the state are near 100 degrees. NatGasWeather has high pressure keeping the western two-thirds of the country warm through October 7, so cooling demand is hanging on into October.
Up in the Great Lakes and Northeast, overnight lows in the 30s and 40s are pulling the first heating demand of the season. Good for a regional bid. The national balance doesn’t feel it.
Then there’s the second full week of October. The forecasts have most of the Lower 48 in the 60s to 80s. Nobody’s running the heat or the air conditioning much in that.
A Light Storage Estimate Isn’t Enough to Turn Gas
I’d call Thursday’s storage estimate friendly on paper and not much more. The EIA number is expected at 79 Bcf for the week ended October 2. That’s slightly above last year’s 77 Bcf build but below the five-year average injection of roughly 96 Bcf.
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See all Natural Gas forecastsThe cushion is the problem. Last week’s 64 Bcf build put working gas at 3,415 Bcf, about 79 Bcf over the five-year average. Supply is still outrunning demand too, with production near 107.5 Bcf per day against demand near 103.
Shorts aren’t going to sweat a smaller build on top of that cushion.
The Gulf Low Is Tracking Away From the Gas
The broad low the National Hurricane Center is watching in the southwestern Gulf isn’t worrying anybody yet. It has little chance of developing over the next 48 hours and 40% odds over seven days. The guidance takes the moisture toward the eastern Gulf and the Florida Panhandle. That’s well away from the Central and Western Gulf production areas and from Sabine Pass, Cameron and Corpus Christi.
Offshore Gulf production is only about 2% of U.S. dry gas output anyway. A westward shift in the track would change the conversation.
Europe would trade storage problems with the U.S. in a heartbeat. Its tanks are only 72.4% full with the five-year seasonal average sitting at 87%. Strait of Hormuz security worries pushed November Dutch TTF up to €75.07 per megawatt-hour Monday. U.S. LNG has a willing buyer across the Atlantic, but that’s not what’s moving November gas today.
Daily November Natural Gas Futures Technical Analysis
November natural gas is trading just above the 50-day moving average at $3.032 after testing the $3.00 area.
The first upside test is $3.087, followed by $3.146. A close back above that area would put $3.216 and $3.264 in play. Above it, $3.350 and $3.395 are the next upside objectives.
Failure to hold the 50-day moving average would leave $3.00 exposed again. Below it, support comes in at $2.912, $2.902 and $2.896.
What to Watch
The afternoon weather update matters more than anything else on Monday’s calendar. Mild through mid-October keeps sellers comfortable. Thursday’s storage number lands on a big cushion. The Gulf low is headed the wrong way to matter for supply.
Buyers drew their line at the 50-day moving average at $3.032 after the early test of $3.00. Resistance starts right on top of them at $3.087. The market is caught between a defended round number and resistance that hasn’t been challenged yet. The selloff doesn’t start to look exhausted until $3.264 goes.
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