Natural Gas on the NYMEX faced a negative week closing 12.4% lower than a week ago at $2.25.
EIA confirmed on Thursday a build of 70 Bcf for the week ending September 4 which is considered enough bearish for this time of year. Inventory is currently 17.6% higher y/y. 13.1% above the 5-year average. As fall contracts tend to exhaust before one last winter spike on seasonality, we need to stay cautious on near term charts and follow momentum.
Besides, the January contract has lost just half of this exhaustion, so we remain positive about a higher direction precisely on seasonality. That last Daily MACD bearish crossing had us warned two weeks ago and it is probable that range-bound behavior will emerge for the coming month.
$2.00 must offer support eventually. Besides, hurricane Sally could offer another spike immediately. The next 4hour MACD crossing will show enough positive momentum. Daily will bring back the uptrend sentiment for this market. This might take a few more weeks or so. That is why physical trading volumes are so important to follow. We don't want to pay too much attention at LNG exports at this point, as the domestic demand absorbs more than 90% of the Natural Gas produced in the United States. U.S. economic recovery is far more important. Supply and demand have recently showed extraordinary resilience amid the COVID crisis. We cannot follow rumors or political agenda just before the election at a time when the oil and gas industry faces consolidation, let's stay objective on data. The dollar Index to be routinely monitored as well as U.S. macro data.
Daily, 4hour, 15min MACD and RSI pointing entry areas. 4hour-RSI looking well oversold while green volume is definitely needed. 