Natural Gas week ahead.

Natural Gas futures on the Nymex had a volatile week before closing 2% higher than the previous one at $2.61. Another high build in working underground stocks, for a week ending May 3, confirmed by the EIA on Thursday at 85 Bcf which slowed a little this bounce we are seeing inside the $2.50 – $3.00 range bound movement that chances are we are going also to look at in the coming weeks. Friday’s session however offered another positive spin while Daily MACD has turned positive a week ago. We like to sell any bounce, or rally even, on first sign of weakness, as the sentiment for U.S. Natural Gas market is bearish overall. We cannot buy for a longer time frame, not before a $3.20 break out which might not even happen before next Fall. Summer demand will support the price which is getting fundamentally pressed also by new project cancellations or even legislature banning new distribution channels and customers, Oregon’s and New York’s latest examples are concerning, as well as the need for price to remain competitive for exportation and electricity generation. Demand will remain low for another week on milder weather across the Lower 48. Dollar against majors must be permanently monitored, U.S. economy’s Macro figures and jobless rate at lowest level in 50 years, as well as new export agreements should do enough to support the U.S. Natural Gas producers not to face prices below the $2.50 – $2.25 level. Daily, 4hour, 15min MACD and RSI defining our entry points.

 

 

Dimitris Kontoulis.