Daily Call

Back At the Low End of Recent Range

We are at Spring break locally here so I will do my best to publish the Daily all week. Not sure why I am worried about publishing as the market has not moved out of the range that has held the market in Feb and now most of Mar. Would be very startled if there is any dramatic alteration to trade behavior.

Major Support: $3.051, $2.87-$2.84, $2.640-$2.57
Minor Support/Resistance : $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

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Expiration At the End of Week

Weekly Continuous

April gas traded down to the upper boundary of a zone of support between $2.775 (April’s February low) and $2.922 (where there are multiple daily lows) before rallying and failing again at another lower high ($3.270 v $3.317). Volume and open interest fell as the prompt declined . For the last two weeks the change in open interest has been technically negative. During the past week with April lower from Thursday – Thursday (open interest statistics always lag one day) the total number of contracts outstanding fell 68,613 Since open interest peaked on 02/02 (along with volume) at 1,710,172 contracts 193,844 have been liquidated. The daily closing price difference of prompt gas on 02/02 and 03/19 is $.135/dt. That seems to suggest that the gas market is absorbing substantial liquidation without a corresponding price decline. A year ago, total open interest reached a low of 1,465,145 during April just before the Q2 ’25 rally kicked off.

While the nearby contracts ended the week modestly weaker (April through November lost between $.007 and $.064). November the strongest, May and June the weakest, distant deferred gas showed considerable sponsorship. The Q1 ’27 months gained an average of $.128. Weakness in nearby contracts while distant deferred contracts gain is characteristic of “bear” spreading (the simultaneous purchase of one, sale of the other) suggesting the expectation of profiting from lower prices. “Bear” spreading works when the nearby contracts falling faster than the deferred contracts. if large participants were anticipating rising prices or a lengthy trading range, premiums awarded to deferred contracts would be expected to diminish relative to the nearby.

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Not Much To Add

Daily Continuous

Not sure what can be added to the last couple of Daily’s as the market remains in the tight range from late last month, regardless of the war and an anemic storage injection. Would expect the close of week as slow as the last couple of days.

Major Support: $3.051, $2.87-$2.84, $2.640-$2.57
Minor Support/Resistance : $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

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Late PM Catches Bid

Daily Continuous

Was listening to the news yesterday afternoon and nothing crossed my eyes that would catch the mark at the end for a $.15 rally. All I read was the the storage number was to be the first injection and a large one at that. Not exactly bullish news. Again, due to the war and impact on Crude (up slightly on the day but well off of its highs) technical and fundamental news can bias the market (volatility) in odd ways.

Major Support: $3.051, $2.87-$2.84, $2.640-$2.57
Minor Support/Resistance : $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

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Been Here Before

Daily Continuous

We have been here before, trading lower testing support, the question this time is the same question remains. Does the market have enough sellers (in spite of the war) to break through to lower levels testing mid-range support.

Major Support: $3.051, $2.87-$2.84, $2.640-$2.57
Minor Support/Resistance : $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

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Energy Complex Quiet

Daily Continuous

Crude and gas markets were quiet yesterday coming off the weekend. Until there is something dramatic in the the crude pit (one way or the other) I would look for gas to remain in the range discussed in the Weekly section.

Major Support: $3.051, $2.87-$2.84, $2.640-$2.57
Minor Support/Resistance : $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

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Crude Leadership Slows?

Daily Continuous

While it is likely that NatGas will follow the rallies and support found in the Crude trade- it is becoming evident that the Crude trade may be “calming” which will limit any dramatic moves in gas. Trade seems to be quiet in the early Sunday night markets in both commodities. While traders looked to the weather report releases a month ago– now we have to watch the news channels. One solid element of trade, with the slowing of volatility — options can provide a lower cost avenue for directional bias.

Major Support: $3.051, $2.87-$2.84, $2.640-$2.57
Minor Support/Resistance : $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.35, $3.486-$3.494, $3.567, $ 3.736

Gas Continues Shadowing Crude

Weekly Continuous

April gas, likely still bid in sympathy with the rise in crude (which gap-ped higher on the way to the highest trade since 06/15/22 ($119.48), $28.58, 31.4% above last week’s close), went its own way after trading a lower high. Prompt gas finished the week $.055/dt lower, April crude, which goes to settlement on the 19th, closed at $98.71, $7.81 higher. After closing the remainder of a gap left on 02/09 ($3.316 – $3.387) April gas failed at its 40 – weeks SMA well short of the last lower high traded on 02/09 at $3.659.

There is a distinct similarity to the recovery rally following the high volume 02/02 decline and the absence of volume. Between 02/03 and 02/06 prompt March rallied from $3.155 to $3.659 with declining volume (discussed here). On 03/09 March gap-ped lower. Since trading to $2.961 on 03/10 April has rallied to $3.317 (similarly gaining with falling volume). If it is not the same, it rhymes. Unless April can hold a trend line rising from the lows of the last two weeks ($2.775 and $2.867, currently about $3.051 and the trend line from July low & March low) there is an increasing likelihood of a test of the zone between the January and February lows of April gas ($2.604 – $2.775).

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Storage Gives Neither Support or Selling

Daily Continuous

Storage report provided little directional bias and the market responded accordingly. I did find it interesting that the gas market remained flat while the crude market was up over $5.00 (nearly 6%). It seems like the two commodities are separating their relationship and or linking that occurred two weeks ago.

Major Support: $2.87-$2.84, $2.640-$2.57
Minor Support/Resistance : $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.26, $3.42, $4.063, $4.086, $4.593, $5.333, $5.496

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Stool Found the Fourth Leg

Daily Continuous

Discussed yesterday that the market lost one of its legs with the declines in the crude market. That analysis was laid to rest yesterday with Gas coming back during a rather tepid run in Crude, It now rests at the initial near term resistance and I will be interested if it continues to run (not sure of the fundamental reason for a rally) or just gives up the gains and returns to test the support side of the range. Today is storage report and perhaps the market will find some bullish inference from the report .

Major Support: $2.87-$2.84, $2.640-$2.57
Minor Support/Resistance : $3.16-$3.148, $3.136, $3.02-$2.97
Major Resistance: $3.26, $3.42, $4.063, $4.086, $4.593, $5.333, $5.496

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