Natural Gas week ahead.

Nymex Natural Gas forward contracts had a positive week as price is bouncing after a prolong negative period. Friday’s session closed 1.80% higher than the week before at $2.46. Demand is increasing as warmer days are finally here in most of the Lower 48 and Canada. Thursday’s EIA storage report confirmed an 81 Bcf build which is slightly below the 5year average for a week ending July 5. The refill season saw record high injections so far and we already sit on a 12.5% higher stuck than a year ago. Price remains 11% lower compared to last season. We want to sell rallies on fundamentals yet we followed and extended a short term buying move last few weeks, inside a range bound typical for U.S. Natural Gas, while the Daily MACD reversed positive. We will find opportunity to sell this bounce or any given rally and odds will favor us when the Daily MACD will turn red once again. Tropical storm Barry will disturb infrastructure while half of Gulf production is already offline but this affects more the Oil industry. Demand typically decreasing on situations like this so price will not advance aggressively. Hedging, however, from various market participants, is always expected while trading volumes are not yet in typical summer holiday lower levels so we have to be careful as a broad area is being affected while “Barry” looks enough tilted. Trading volumes, U.S. macro figures, Dollar against majors always to be monitored closely. Daily, 4hour, 15min MACD and RSI defining our entry positions.

 

 

Dimitris Kontoulis.