The September 2021 NYMEX natural gas futures contract spent its first full week as the prompt month contract trading in a 29 cent range. The contract saw a high of $4.205 and a low of $3.915 and closed the week up 22.6 cents. Natural gas continues to be well supported by demand from both the power generation sector and by exports. LNG exports averaged almost 11 BCF/day last week while pipeline exports to Mexico are at a record high of over 7 BCF/day. With above normal weather forecasted in most major consuming regions for the next two weeks, demand from the power generation sector should remain very strong.

For the week ending 7/30, the EIA reported an injection of only 13 BCF into natural gas storage. The injection was smaller than a market consensus of 20 BCF. Storage inventories are now 16.6% below year-ago levels and 6.4% below the previous 5-year average. With demand for natural gas expected to remain very strong coupled with flat production, traders are paying much closer attention to expected storage levels to start the upcoming heating season and how inventories might look heading into next year's refill season.

Resistance for the September contract is seen at $4.20, $4.50 and $4.80. Support is seen at $3,90, $3.67 and $3.49