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. 