Natural Gas futures on the Nymex faced a negative week amid volatility closing at $2.00 on Friday, 7.80% lower than a week ago.
A bounce in the beginning of the week offered an opportunity for market participants to sell once again on this typical seasonal downtrend. EIA confirmed on Thursday a withdrawal of 109 Bcf for the week ending Jan.10. Working underground stocks keep decreasing at a normal pace and this just isn't fast enough as they are still 19.4% higher than a year ago following the last extraordinary refill season.
As we move closer to spring a question remains: how much lower than the $2.00 will the next floor be for this market before Summer's increase in demand?
Technically, it can move way below the $1.50. The March to April spread will offer a benchmark as soon as ranging is inevitable. This market looks abiding bearish as the 2016 lows still shaping its longer-term sentiment. The $2.50, however, must still be considered as a future rebound invitation even given the winter. Bounces are expected, both way spikes very typical on early momentum and speculation, which can offer fresh opportunities.
Demand for heating remains low to moderate yet U.S. housing starts are at 13-year high. This is another bearish sign. U.S. Natural Gas producers must now offer even more competitive prices to overseas importers and the commodity must compete with domestic renewables' increasing ability to offer cheaper cost for electricity generation. This market share is crucial. We like trading the shorter-term charts on season's direction so we do not have to overanalyze. Daily, 4hour, 15min MACD and RSI pointing entry areas. U.S. macro data and the U.S. Dollar Indexto be routinely monitored.
