Natural gas futures on the Nymex had a positive week before closing 6.8% higher than the previous one at $8.71. EIA reported on Thursday a build of 89 Bcf in working underground stocks for the week ended May 20. Inventory is currently at 1,812 Bcf, 17.6% lower y/y, 15.3% below the 5-year average steadily above the 5-year minimum.
We have no interest whatsoever in buying this market at current levels. Greed and bad calculations by most market participants and by worldwide trading offices in reality, along with fixed articles in the news media, will ultimately kill this market's uptrend.
The direction for U.S. natural gas is for $3.50 for the April of 2023 future contract. Fundamentals are going to kick-in sooner rather than later.
We are gearing-up for another season of selling NG short. Exhaustion on the near term charts in any directional trading is apparent; same with the European benchmark.
In January, as China signed a 30-year contract with Russia, the price for U.S. NG was $3.70. This occurred at the same time that the US had already provided Europe with five times the volume it had received from Russia over a three month period.
Even with all the potential excess quantity destined for the next ten years to Europe, in the best case scenario, U.S. exports will remain a 3/30 fraction of the total consumption.
American producers and midstream operators have their eyes on gas-fired electricity generation as the market share in focus. Competition from renewables and nuclear is picking-up fast.
Utilities CEOs in Europe and around the world are questioning the use of natural gas in the power generation sector. This as global methane emissions are at record highs.
U.S. macro data and the Dollar Index must be monitored routinely. Daily, 4hour, 15min MACD and RSI are pointing to entry areas. 