Natural Gas week ahead

The Natural Gas market on the Nymex had a bullish week closing 7% higher than the week before at $2.97. Trading volumes were also significantly larger, which indicates that price may be heading for a new range bound a little bit higher, between $2.80 and $3.10. Some forecasts for hotter weather in the Lower 48 might suck some cubic feet while we are still in the refill season. Yet storage space will be made available in oversupplied areas as the Permian, where distribution difficulties traditionally occur during summer. President Trump’s words about U.S. agenda to finally export large amounts of LNG to Europe had also a positive impact on price. However, I still do not want to buy it for a longer period, as technically, to do so, we need to see sustained $3.10s, before winter comes. Opportunities to sell these rallies will occur naturally, if we remain patient to find out what this upper bound will look like, in the coming days even. Oversupply still a major issue for the market and nobody in the industry will want to see upcoming winter prices making renewable look even more attractive alternative in power generation, nor U.S. natural gas unattractive for overseas importers. Stronger Dollar against major currencies have to be monitored regularly. Daily, 4hour MACD and RSI indicating entry areas.


Dimitris Kontoulis.

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