Natural Gas Support At $3.30 To Be Tested
Dimitris Kontoulis | Jan 15, 2022 07:17AM ET
Natural gas futures on the Nymex had a volatile week before closing 7% higher than that of the previous week at $4.22. The EIA reported on Thursday a rather bullish draw of 179 Bcf in working underground stocks. Inventory is currently at 3,016 Bcf, 6.2% lower y/y, 2.4% above the 5-year average. Both percentages are looking steady while the average rate of withdrawals from storage is 23% lower than the five-year average so far in the withdrawal season.
After the price crashed quickly on this post-winter downtrend, we had been anticipating a relief rally before it started selling again. The recent blizzards in the US Northeast have offered just that.
Any spike will be considered to be a true seasonal gift on our way to $3.30 for the shoulder contracts. The same ranges will provide multiple ' profit as the market is having a tough time finding new buying volumes from the crucial domestic market.
This is happening at a time when LNG exports are at a record high. American Natural Gas' affordability has been saving Europe's dignity recently. So far this month EU import volumes of American LNG have been 5 times higher than that received as a result of the transition to Russian pipeline supplies.
Range bound behavior on colder weather is expected until the market tests the $3.30 support level. At that point we are going to be looking for a seasonal floor. U.S. macro data and the Dollar Index have to be routinely monitored. Daily, 4hour, 15min MACD and RSI are pointing to entry areas.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.