The Weekly Natural Gas Market Newsletter

August 1, 2022

Natural Gas News & Notes

The August NYMEX natural gas futures contract expired Wednesday at $8. 867.The month of July saw natural gas futures cap the biggest monthly advance in almost 13 years. The August contract printed a low of $5.325 ahead of the 4th of July weekend and printed a high of $9.752 the day before expiration. Record setting heat that blanketed most of the country was the primary driver of the rally. The September contract now takes over as the prompt month contract.

For the week ending 7/22, the EIA reported an injection into storage of 15 BCF. This has been the smallest weekly injection of the summer so far. Storage inventories now stand at 2,416 BCF which is 10.8% below year ago levels and 12.5% below the previous 5-year average. With the heat increasing power generation demand for natural gas to record setting levels, weekly storage injections will likely remain below normal. The early estimate for next week's report is an injection of 32 BCF.

The extreme price movement in July had put the market in a technically oversold condition. The September contract has already tested support at the 10-day moving average of $8.075. So, far that support level has held. The 40-day moving average at $7.30 would appear to be another level of support, that if tested, would hold. End users with open positions should be carefully watching the market for pull backs. As has been demonstrated several times this summer already, market pull backs have been short lived. As of now, there's nothing that would indicate that extreme price volatility will ease up anytime soon. In fact, as the market heads into hurricane season, the probability of seeing even more price volatility exists.