Natural Gas week ahead.

Natural Gas on the Nymex met another positive week amid volatility. Friday session closed 2.70% higher than a week ago at $2.78. EIA reported 34 Bcf have been injected for week ending November 1. This is the first figure showing this, exceptional in volume, refill season is finally over. Working underground stocks at 3,199 Bcf 16.6% higher than a year ago, 0.8% above the 5-year average. At the same time many rigs remain offline and down from last year’s record high production more than 30% which means market participants have another reason to keep a close eye on this Winter price spike on higher demand for heating and electricity generation. An arctic blast is already threatening U.S. northern states and will remain on track with cold lows. We like to buy the dips since late July while seasonality feature is being integrated. Market is in an uptrend since then and will offer some positive sentiment for another couple of months despite its bearish fundamentals. $3.00, even $3.50 must be considered attainable. Latest U.S. macro data favor this move as well. Price 25% higher than a month ago, 26% lower year-to-year. Following a sensible pullback we anticipate a reverse into green on the 4hour MACD to overpower Thursday’s large selling volumes so we can start buying again. We do not have any temptation whatsoever to short sell at this time of year. We will evaluate Spring forwards later in Winter. Dollar against majors to be closely monitored. Daily, 4hour, 15min MACD and RSI offering precision to our entry decisions.

 

 

Dimitris Kontoulis.