Natural Gas week ahead.

Natural Gas on the Nymex lost momentum during the week closing 1.15% lower than the previous one at $2.59. Thursday’s EIA storage report confirmed another large build of 100 Bcf in underground working stocks for a week ending May 17. Almost two months in the refill season and triple-digit builds are coming week after week which is a very negative sign for price also for the months to come. Record high production will keep pace with any raise in demand for electricity generation and cooling later in the dog days. Analysts already alert as June weather models are showing moderate temperatures across most of the Lower 48 states. We like to sell any rally or even momentum roll over on shorter time frame charts as fundamentals are bearish for U.S. Natural Gas last few years. Producers will feel lucky if the $2.50 – $3.00 range bound movements endure the summer months without breaking below. Support at $2.50, which is a dominant floor, starting to look weak. In any case we can’t buy the longer term, unless a substantial break out above the $3.20 occurs. This is a low percentage scenario to flourish earlier than next Fall. Constantly monitoring the new infrastructure developments which are urgently important for stabilizing interests of many market participants, U.S. macro figures and Dollar against majors, in this rather volatile environment after the last political decisions regarding trade agreements. Daily, 4hour, 15min MACD and RSI offering precision in our entry points evaluation.

 

 

Dimitris Kontoulis.