Natural Gas on the Nymex had a positive week closing at $2.35 on Friday, 6.60% higher than a week ago. Price continued to climb even after a very large build, confirmed on Thursday by EIA, showing a 104 Bcf were injected in working underground stocks for the week ended October 11. This is another bullish sign as weather models for the Lower 48 indicating the first really cold shots are here and a bullish crossing on the daily MACD already looking stable. For the past few months we have liked to buy all these rallies on the market’s seasonality feature early integration on price while Winter contracts start trading in larger volumes. We talked about a floor late in July, as we felt price was only shallow to the $2.50 long-term support at half the demand. We can use any uphold above the $2.20 even for shorter-term rallies. We targeted the $2.35 as a higher backing level while $2.70 is looking attainable shortly.
This move will encourage even more market participants to come in for this, almost traditional, Winter spike on hedging and short term use of the U.S. Natural Gas market. I do not think we will witness the same highs as we did last year, the market still faces very strong negative fundamentals shaping its longer-term sentiment but buying is what we do this time of year on calendar analysis as well. Range bound movements in an uptrend are very likely for another two months. Refill season extended and already on extraordinary outcome, working gas volumes in underground storage 16% higher than a year ago, price 27% lower. Henry Hub January contract currently at $2.66, July 2020 at $2.35. Principal U.S. macro figures and dollar against majors to be closely monitored. Daily, 4hour, 15min MACD and RSI pointing entry areas. Daily EFI above zero.
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