Takeaway

The presenter argues that October natural gas futures (NGV26) are under pressure from Tropical Storm Edouard, which is depressing ERCOT power load and moderating LNG feedgas demand along the Gulf Coast. While the technical picture shows the contract testing key support and the upcoming weekly storage report is expected to be bullish, the immediate bearish weather factors are driving the price action.

What the presenter said

• Natural gas is selling off due to Tropical Storm Edouard's imminent landfall, which is expected to lower ERCOT power load and solar generation. [0:24]
• Technically, the NGV26 contract is holding the 13-period exponential moving average at 2.8520, but the daily RSI has crossed to the downside, suggesting further pressure. [0:51]
• The upcoming Thursday storage report is expected to be bullish versus last year and the five-year average. [0:09]
• On the hourly chart, the RSI is oversold. The price is holding around the former first support level, now resistance, at 2.8620, with second support seen at 2.79. [1:19]
• Significant heat remains in the US, with over 115 million people under a major heat risk today, rising to 56.6 million under an extreme heat risk on Thursday, focused on Texas and the Southeast. [4:30]
• European gas storage is over 65% full, but the presenter notes that Great Britain's storage is at a low 31% fullness with declining injections. [7:16]
• LNG feedgas is being moderated by the storm's path. Cameron LNG has pulled back slightly to 1.46 BCF, and Golden Pass is running at a reduced rate, while Corpus Christi, outside the storm's path, is running hot at 2.63 BCF. [10:02]

Trade ideas

• None stated. The presenter summarised the market view as being under near-term pressure from the storm's demand destruction, while noting the contract is testing technical support at the 13-period EMA (~2.852) ahead of an expected bullish storage report.

Levels and data cited

• NGV26 (Oct '26 future): Trading at 2.857.
• NGV26 Daily Pivot: 2.905.
• NGV26 Support: 13-period EMA at 2.8520, second support at 2.79.
• NGV26 Resistance: 2.8620 (previously first support).
• Jan vs Oct Spread: Trading at 1.0140; a gap at 0.927 remains below.
• ERCOT Load: Expected just under 86,000 MW today.
• EU Gas Storage: 65.1% full.
  • Germany: 53% full.
  • Great Britain: 31% full.
  • France: 16% below last year.
• US LNG Feedgas:
  • Cameron LNG: 1.46 BCF (of 1.56 BCF capacity).
  • Corpus Christi: 2.63 BCF (of 2.75 BCF capacity).

Risks and what would invalidate this

• Tropical Storm Edouard causing lower power load and impacting LNG production.
• RSI crossing to the downside for natural gas futures, indicating bearish momentum.
• Low European gas storage levels, particularly in Great Britain, could lead to winter supply issues.
• The ongoing conflict between Iran and the United States, which the presenter expects will keep the Strait of Hormuz closed and impact global LNG traffic.