Natural Gas week ahead.

Natural Gas futures on the Nymex faced a negative week closing 8% lower than the week before at $2.25. Thursday’s EIA storage report showed a close to 5year average build, for a week ending July 12, at 62 Bcf. This figure however stands 25% higher than same week a year ago. Daily MACD have already crossed bearish on July 16 and price got further pressed in this highly anticipated exhaustion. We are looking at a range bound price very common for this time of year, any gaps are to filled and market forces will cancel one another while trading volumes will eventually decrease in August. U.S. Natural Gas market faces negative fundamentals for quite a long time yet Dog Days’ increase in demand for cooling will help most of producers hold decent levels in most of pricing hubs as renewable looking more and more competitive in gaining market share in electricity generation. We wanted to see this Daily MACD turning negative to start selling again but we must stay suspicious as we approach the lower bound while we are still shallow compared to the long term support level of $2.50. This range and any potential new support level, extra lower, will offer us a reliable benchmark for the Winter season contracts. We cannot buy this market for a long run unless we see a clear break above the $3.00. U.S. macro figures and the Dollar Index have to be closely monitored. Trading volumes, Daily- 4hour- 15min MACD and RSI offering fidelity to our entry decisions.

 

 

 

Dimitris Kontoulis.