Natural Gas futures price nose dived, consecutively for the last three weeks, despite of advent of withdrawal pattern since November 16th, 2017, rather than weekly injections till November 9th, 2017 when the Natural Gas futures price was trading at the level of $3.213.
Source: Energy Information Administration https://www.investing.com/economic-calendar/natural-gas-storage-386
Hard Facts
1. On analysis of the movement of Natural Gas futures price ever time, before and after the inventory announcement of Natural Gas stock piles, I find that the Natural Gas futures price always runs upward before the inventory announcement and have already had factored in the upcoming inventory, which has already been available by different companies, involved in energy research.
2. Every inventory announcement is followed by a nose-dive move, most of the time since last few weeks.
3. Every fundamental is kept aside, while selling starts after the inventory announcement.
4. Even demand and supply equation is igored while sell off begins.
5. Reason is only one, level of upcoming inventory has already had been factored in the Natural Gas futures price level just before the announcement of inventory on every thrusday.
6. An uptrend starts building up with first trading day of the week and the downtrend open its mouth after the inventory announcement.
Worst Seems To Be Over Now
1. Upcoming natural gas inventory is expected to be withdrawal of more than 300 bcf on January 12th, 2017 and thereafter a monster draw afterward during the upcoming weeks.
2. Comparison of current stock position with last five year average is shown in the following chart.
Summary
Working gas in storage was 3,126 Bcf as of Friday, December 29, 2017, according to EIA estimates. This represents a net decrease of 206 Bcf from the previous week. Stocks were 192 Bcf less than last year at this time and 192 Bcf below the five-year average of 3,318 Bcf. At 3,126 Bcf, total working gas is within the five-year historical range.
Note: The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2012 through 2016. The dashed vertical lines indicate current and year-ago weekly periods.
3. Beijing's crackdown on pollution has put China on track to overtake Japan this year as the world's biggest importer of natural gas.
4. Refiners along the east coast are bracing for problems in the next few days, and the five area coastal refineries are dealing with frozen pipes and other challenges but have not experienced any significant outages.
5. America's power grid may be showing signs of strain, as some natural gas plants in the midwest are said to be having trouble getting supplies.
6. No doubt that the middle of January is starting to show signs of warming trend, but east coast storm may brush major cities.
7. Italian gas grid company Snam has launched a 33 million euro ($40 million) tender to convert its car fleet to Natural Gas in a sign of its commitment to develop gas fuelling stations in the country.
8. A wave of freezing weather hitting the eastern United States has spiked demand as cold weather entices customers to turn up their thermostats. In fact, Bloomberg data showed that the U.S. burned record levels of natural gas just as temperatures hit all-time lows on New Year’s Day.
9. Adding to the supply side of the bullish equation, the severe cold is actually cutting production as water vapor in pipeline systems freezes and thus hinders the flow of gas.
Conclusion
On analysis of all the fundamental facts and demand-supply equation, I find that the worst time for Natural Gas futures price seems to end now. Now, no more nose dives will follow an impending inventory announcement because changing weather will result in monster draw from stockpiles, amid domestic demand; will also result in attracting the natural gas bull from the January 16th, 2018.
I conclude some expected propositional trading zones, from January 7th, 2018 to February 26th, 2018, as follows:-
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