Natural Gas Range Bound Above The Season's Floor
Dimitris Kontoulis | May 16, 2021 01:38PM ET
Natural gas futures on the NYMEX remained flat during the week closing at $2.97 on Friday. EIA reported on Thursday a build of 75 Bcf after reclassification. Total inventory is currently at 2,029 Bcf, 15.7% lower y/y, 3.4% below the 5-year average. It looks like we are going to have a shallow refill season with inventory increasing smoothly, just around the 5-year average level.
For the past month we had been anticipating exhaustion on range-bound behavior and we have wanted to see the next Daily MACD bearish crossing so we can start selling another few times towards the season's floor. The market has been looking way too comfortable above the $2.50 in the past few weeks, showing us a floor, but it needs a ton of fresh buying volumes to overcome old resistance levels and breakout in uptrend for the winter contracts. I think we will have our last chance just now. In any case we must respect the Dog Days contracts which are already trading on large volumes. Demand for natural gas is looking decent and it will provide a useful benchmark for the coming winter.
U.S. macro data and the Dollar Index to be routinely monitored. Daily, 4hour, 15min MACD and RSI are pointing to entry areas.
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