Nymex Natural Gas market faced a negative week. Friday session closed 15% lower than the week before at $3.78. Thursday’s storage report showed a 77 Bcf withdrawal which is average for the season. Price couldn’t hold much and broke down from previous support aggressively on Friday. It is now clear that last month’s highs, were not only caused by ordinary seasonality integration and colder weather models forecasts for coming winter in the Lower 48 states, but also because of speculation at extraordinary trading volumes and standard hedging behaviour of major market participants. Market might be even heading, with the same aggression, towards longer term Fibonacci support around $3.20. Trading volumes are back to average. Milder weather expected for the coming week will bring about lower demand than average for heating and electricity generation. We like to sell rallies on exhaustion for last couple of years, as 2016 lows and abundance of U.S. Natural Gas are still shaping a bearish sentiment for the longer term. Winter is not over though, peak months are here and we remain loyal to the daily, 4hour and 15min MACD reverse areas, forming reasonable range bounds most of the time. Dimitris Kontoulis.
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