Natural gas futures on the Nymex had a volatile week before closing 3.6% higher than the previous one at $5.62. EIA confirmed on Thursday another bearish build for this time of year of 63 Bcf in working underground stocks. Total Inventory is currently at 3,611 Bcf, 8% lower YoY but only 2.7% below the 5-year average. Refill season is being prolonged.
Ranges are moving lower not at the pace we had anticipated. Spikes are being smoothly formed because of hedging activity. This is a good thing as we are trading the seasonality directionally. The same ranges are giving multiple times the profit.
Price has already met resistance at $5.75 twice, offering fresh selling opportunities. Downtrend continues and the $4.80 support level is soon to be tested on our way to lower lows for the spring contracts. We are going to continue to sell rallies on exhaustion on near-term charts.
Macro is getting trickier in the US and the northern hemisphere on Covid resurgence. Arabs, Russians and American producers are becoming even more stingy. Spooked by the picture of the world they have seen coming in the next ten years on the climate crisis resolutions that the governments need to take.
Demand for their products in few year from now will much resemble to the spring 2020 setting. Renewables and nuclear are here to stay. All producing countries have serious real-estate issues to solve, bubbles. At the same time, the world is focused on China Evergrande (OTC:EGRNY), which has more than 20 times the assets for the liability it has to deal with.
Financials are not the same for the OPEC+ countries especially Saudia Arabia, Russia, Qatar and the Emirates on their push to diversify their economies deeply dependant on oil and gas income. US macro data and the US dollar index to be routinely monitored. Daily, 4-hour, 15-min MACD and RSI are pointing to entry areas.
