Author: Willis Bennett

Storage Release Supports Gains

Daily Continuous

It was clear that the storage release supported the recent gains and gave the momentum to challenge the $3.00 level. We shall see how far the momentum will carry the action but I would caution against loading up on this rally- rather wait and see how the holiday set up plays.

Major Support: $2.843, $2.727, $2.648
Minor Support :
Major Resistance:$2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461,

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Expiration Eliminates Oct Premium to Sep

Daily Continuous

Discussed yesterday that the expiration may have unexpected support due to the amount of selling that occurred in the last couple of week. That support brought the weak Sep contract up to the Oct contract level that takes over as prompt tomorrow– just in time for a storage release. A brief pause to initiating new positions may be warranted.

Major Support: $2.727, $2.648
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461,

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Expiration

Daily Continuous

Not a lot has changed going into the expiration. The chart has rolled over to the October contract. The only observation I have is that the selling runs out during the trade day — it almost seems like all the selling for the last couple of seeks (creating the over sold condition) has created the need for some brief short covering support at the end.

Major Support: $2.727, $2.648
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461,

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Options First

Daily Continuous

Expiration of the September contract is upon us with options going out today. Yesterday tried to extend the lows only to find some support, likely from some folks covering earlier placed shorts. Would leave the market alone for now unless you are looking for some lows in the winter months as the trade is starting to catch the recent trend.

Major Support: $2.727, $2.648
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461,

Spot Closes At It’s Lows

Daily Continuous

Prices opened Sunday fulfilling the expectation of lower prices during the expiration of the September contract as discussed in the Weekly area. Suggest reviewing those comments for not only the upcoming expiration, but also prices later in the year.

Major Support: $2.727, $2.648, $2.514
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461,

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Expect Further Declines

Weekly Continuous

The collapse continued last week as prices extended the declines though some support trend lines and previous month lows. The violated trend line now becomes ascending resistance, as the dominant near term technical factor. Given soon to expire September’s weakness into the week’s close the trend line is likely to contain any near term short covering rally as well as any early sponsorship for October (which closed at $2.800, $.122 premium to September and also below the coming week’s value of the trend line). Given the violations of trend line support during the last two weeks and prompt gas entering the seasonally weak period during the coming week (Labor Day falls on September 1st this year), the upside prospects for the expiring contract and new prompt October seem low.

Historically, the days leading into and following Labor Day has been one of the most consistently price negative periods all year. Since I first noticed the tendency, declines were and continued to be consistently in double digits. When they weren’t (which was rare) I learned from history, that when the markets that fail to decline when they are supposed to (based on historical norms) are likely going to go up and less than average declines tend to precede robust Q4/Q1 rallies. In ’23 the decline was 12.5%. The entire Q4 rally was a little more than a dollar counting the premiums awarded to the November and December contracts. The Q4 peaked on 10/31/31 at $3.630, 70% higher than the pre Labor Day low. A year ago the Labor Day decline was short and measured only 7.4%. During the period that immediately followed (about three weeks) prompts October and November rallied $.894. You might remember that the rally that began from the pre Labor Day low was not exhausted until early March with the prompt price 164% higher.

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Storage Report on Que

Daily Continuous

Perhaps a brief response to the bearish date flooding the market, a small bounce took prices higher through the day. For bulls be cautious, for bears wait and and sell against any rally .

Major Support: $2.727, $2.648
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461,

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Declines Stall

Daily Continuous

I guess the storage report today won’t be as bearish as last week’s as the market ran low on sellers yesterday. touching the lows from Tuesday — there was no momentum to push prices lower. I suspect that there will be additional downside momentum today if the report is more bearish that current expectations– unlike last week where the seller’s came in before and there were none left when the report was released (at expectations).

Major Support: $2.727, $2.648
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461,

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Low End Range Tested/Broken

The new low for 2025 is now in the process of being completed as prices continued the declines and broke below previous trade lows. Can’t say if this softness is in anticipation of the storage data or just normal seasonal weakness around the Labor Day holiday– either way it is soft out there and few buyers currently. If you are an end-user (consumer of natural gas) you may want to look at the winter strip for gas as a hedge (perhaps Dec and Jan at least).

Major Support: $2.727, $2.648
Minor Support :
Major Resistance:$2.843, $2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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Heading Into Seasonal Weakness

Daily Continuous

Prices continue to challenge the lows but breakdowns receive support which isn’t allowing a dramatic breakdown to occur. Heading into a period of seasonal weakness, so I would not expect a variance to the current trade patterns.

Major Support: $2.97, $2.916-$2.895, $2.858, $2.808, $2.727, $2.648,
Minor Support :
Major Resistance:$2.97-$2.99-$3.00, $3.061,$3.192, $3.25-$3.31,$3.39, $3.62, $4.168, $4.461, $4.501

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