Natural Gas week ahead.

Natural Gas futures on the Nymex had a volatile week which turned negative after Thursday’s storage report, closing 1,70% lower than the previous one at $2.75. Underground stocks for the week ended March 15 came only 47 Bcf short from previous, a number which pressed further the already weak outlook for demand in this typical post winter seasonality’s deficiency. Weather in most of the Lower 48 states and Canada will remain milder than average for this time of year and demand will stand moderate for another few weeks. Following this anticipated bounce, we wanted to see this exhaustion and sell it. All rallies from now on and until fall are to be sold on shorter time frame charts. There are going to be two major forces influencing this market along with the U.S. consumer spending and the Dollar against majors. The agreements for U.S. LNG exports which can support prices and, on the other hand, the competitiveness the same producers want to display for their crop. At the same time U.S. electricity generation will have to be offered in antagonistic levels while renewables are putting pressure on the market these last few years. 2016 NG price lows happened for a reason, at a time when working underground stocks looked even more shallow than current levels. Range bound movements are very probable between $2.50 and $3.00. We will not buy this market unless we see a break above the $3.20. Trading the 4hour and the Daily, while MACD and RSI are offering rigor in our entry and stop decisions.

 

Dimitris Kontoulis.