Natural Gas on the Nymex had a volatile week closing on Friday 5.7% higher than a week ago at $1.66. The market reacted positively following the Senate's $2 trillion coronavirus stimulus package which saw green across the whole board. The rally looks to already giving up just like the previous ones.
EIA confirmed on Thursday a withdrawal of 29 Bcf for the week ended March 20, working underground stocks 80% higher y/y. This is 17% above the five-year average just before the new injection season begins.
From the beginning of the coronavirus crisis, the market has shown steadiness which has been a feature of U.S. Natural Gas throughout the years.
Ranging in seasonal cycles is what this market likes best, offering hedging opportunities to various market participants. In times of general turmoil, it is even more noticeable. Real consumption is now the key in a stay-at-home environment and it is already being affected.
Driven mainly by electricity generation and industrial sector U.S. Natural Gas demand fell 2% week over week. LNG exports decreased also as America is now the epicenter of the coronavirus crisis with most people affected. Rigorous containment measures with an enormous drag on growth is the only answer right now and for the weeks to follow, before a better first response treatment is available.
Lack of adequate public health infrastructure is really sad and in reality this is the reason economies around the world can't remain in operation. More than 4 million Americans are now unemployed. Hopefully, the decrease will be temporary and recovery will begin in a few months. We prefer selling rallies on near term charts while respecting seasonality. A new floor close to $1.30 might be on sight shortly as we navigate unexplored waters in the south seas. U.S. macro data and the Dollar Index to be closely monitored. Daily, 4hour, 15min MACD and RSI pointing entry areas.