Natural gas futures on the Nymex had a bullish week before closing 13% higher than the previous week at $5.54. At time of writing, the May contract was currently at $5.61.
EIA confirmed on Thursday a draw of 51 Bcf in working underground stocks for the week ended Mar. 18. Inventory was at 1,389 Bcf, 20.9% lower y/y, 17.4% below the 5-year average. Stocks remained above the 5-year minimum, but in really shallow territory just before the new injection season was to begin.
Buying based upon calendar analysis has commenced, with the market already giving a 20% uptrend. We now need to see a pull-back as this recent rally on headlines was moving towards exhaustion.
We are going to buy any dip until we reach a seasonal ceiling of $6.50 later for the autumn contracts. The same ranges will give multiple profits on directional trading on the near term charts. Seasonality is going to be respected for another year because of the fundamentals. The momentum is looking really strong as the Daily MACD crossed bullish recently.
The last European orders of American LNG are too small in volume, but find the market at shallow inventory levels. Production remains at a record high. EU demand of US LNG will gradually be for an additional 50 Bcm per year until at least 2030. That is 1.7 Tcf at a time when the American domestic consumption is more than 31 Tcf.
Same story over in Europe that the United States fossil fuel industry has been facing lately. Gas-fired electricity generation is going to meet even more competition from renewables and nuclear. Residential, commercial and even industrial demand will also suffer from the energy transition amid the climate crisis.
Vladimir Putin, the latest world leader acting as an oil and gas salesman, got his country into real trouble because he was too slow in reading correctly the ongoing global transition. His economy and country had become a dinosaur without any flexibility, especially in the case of the oil market. Rather amusing to see Putin literally accepting Bitcoins(!) for oil and gas exports while nobody accepts his 140Bn in gold. We all have to reflect for a moment. The salesman has just discredited the fossil fuels even more.
Too many investors over the past couple of years have been correctly reading the RENIXX World Index, which we first talked about a few years ago. Banks are to follow and too many of them are starting to put their money where their mouth is.
The American Natural Gas industry, however, will have another golden opportunity to show that the commodity will really be the world's bridge fuel. It is abundant, cleaner than coal or oil and it has to be fairly priced.
US macro data and the Dollar Index are to be routinely monitored.
The Daily, 4hour, 15min MACD and RSI are pointing to entry areas. 