Natural Gas futures on the Nymex had a bullish week closing 13.50% higher than the previous one at $3.72. Colder weather in the North and Northeast of the United States drive this rally while demand is expected to rise even higher. We anticipated this, since we are close to the end of the refill season and underground stocks are looking shallow compared to 5-year averages. Price broke up from previous range bound also because of traffic congestion at some major LNG hubs and pipelines such as the Sabine Pass and Cove Point. Even Thursday’s high as 68 Bcf injection in underground stocks, did not press the price and the market saw higher prices on Friday as well. This is another sign for higher price levels, following last week’s bullish flag, while seasonality integration will continue for another few weeks, we need to closely monitor the stronger Dollar against majors, as well as trading volumes regarding different investors and banks hedging based on Natural Gas futures and price gaps between hubs. All the above is typical for this time of season while market sentiment is still developing for the coming winter and higher prices around $4.00 are expected. Yet we should also take into account longer term resistance. We won’t go against the market while trading the short term. RSI in overbought territory for another week. Dimitris Kontoulis.
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