Nag Gas Midweek Recap: 3/13/25
$5.00 looked so close , but now so far! As predicted the market came to its senses and reverted back to some fundamental pricing this week. Although one tweet from Trump and who knows? I better finish this post and get it posted before he strikes again, or I might be at the drawing board before you know it. For the first time in several months, NG prices were not matching weather trends. However, that changed over the past few days as prices plunged as weather trends and the models printed warmer. NG prices finally reacted sharply lower on fundamental news and lack of Trump-o-nomics. The run up in prices has aided in resetting of fundamental levels of pricing. The upper price for the 2025 NG season has been reset close to the 5000 level, more importantly, the long term double top formation in the 4700-4730 range that has been in place since early in September 2022 held and continues to serve as important resistance for the prompt month. One potential technical implication from the quick price surge late Sunday is it has effectively shifted Fibonacci Retracement levels higher. Key 38.2% retracement now exists at 3984, up from 3875, effectively making $4.00 a bit of a stronger support level. So too does the middle of the current 20 day-Bollinger Band currently sitting at 4128. Yesterday was the first fall below the middle band (20D SMA) since February 7th and there has not been an open and close day below it since January 31st.
As for lower technical levels I am watching, the channel trend at 3908, the swing low at 3742, the 50% retracement level at 3702, and the 50D SMA at 3644. Again, I believe we are in an overall bullish pattern. But I will be looking for these support levels for the turn around in price and the beginning of a move higher. I have been discussing my thoughts for the reasons for the move higher for a bit now. But I suggest caution with the Trump uncertainty in the news. The next round of tariffs come into play the first week of April, and with Ukraine and Russia hammering out a peace deal, I am keeping my investing window close. I am only looking week to week for the time being and suggest you do also. We learned this past weekend that fundamentals will be Trumped by Trump every time. For the remainder of the week, I am playing this market to the short side. I did exit my puts last night when the price dropped below 4000. I waited until the report and entered another block of puts. On a purely, short term fundamental basis, I do not see any reason for the market to react and pressure prices higher. I will not plan on holding any large positions over the weekend, due to the geopolitical and tariff uncertainty. But I will take a small strangle, which I will post before the end of the day tomorrow.
I do see some encouraging signs of the coming colder shift in the pattern. Europe is now forecasting colder weather for the next 10 days. A good telegraph for North America. The SSW is finally beginning to show its signs and I believe by early next week the weather models will begin to see it also. The major long-range teleconnections, the AO/NAO/EPO, are modeling colder day 10-40. It is now just a matter of wait and see. The good thing about the recent run up in price is that we are not going to need bitter cold to start the price to rise. We are just going to need below average temps to keep the shoulder season as short as possible. This will keep the price in a bid mode to refill storage. The other factor about past SSW events in the month of March, is that the tend to have very warm Mays, which will put a jump on the US cooling season.
LNG exports continue to show historic production. This week, in Houston, TX, CERA Energy Week conference was held. Industry majors continue to reinforce the bullish nature of the LNG, data center buildouts, and increase in power generation in the US. The main take away from the conference is the one thing that Trump is doing for the NG industry, is cutting red tape. More that 20 BCF of LNG export capacity was approved by the FERC this week, with expedited permitting. The once dead Continental Pipeline is in talks to restart permitting, and most of the steel needed for the construction of said projects have been pre bid, with pre tariff pricing already in place. The demand is there, and the gas is in the ground. There is other bullish issue such and storage continuing to drop. The shut down of 8 GW of coal plants this summer the now talked about warm summer being forecasted. The U.S. Energy Information Administration researchers calculated U.S. natural gas rigs decreased by 32%, roughly 50 rigs, between 2022 and 2024. The majority of that reduction occurred in the Haynesville Shale and Appalachia Basin, which have helped supply the growing demand for feed gas from Gulf Coast LNG terminals during the same period. Both regions declined by a combined 21 rigs last year as natural gas prices continued to crater amid surging oversupply and the pull of LNG demand from Europe.
So, for the immediate future, keep an eye on those lower support levels. Pricing will begin to move higher sooner rather than later. May is not too far off, and the cooling season is about to begin soon in the southern US.
Keep it Burning!
