Natural Gas futures on the Nymex had a volatile week before closing, only 2% higher than the previous one at $4.48. The May contract is trading at $4.49, the October contract at $4.59 on decent volumes for this time of year, and May 2023 is currently trading at $3.38.
EIA confirmed on Thursday, a bearish draw of 129 Bcf in working underground stocks. Inventory is at 1,782 Bcf, 10.5% lower y/y, 10.7% below the 5-year average. Both percentages are now looking on a steady decline, only a month before the new refill season begins.
The American benchmark shows the rest of the world how vital energy security will be in the next decade amid the global energy transition. European gas benchmarks went +60% on Thursday, then -35% on Friday amid European utilities panicking- and ordering from Gazprom and other important European producers.
Of course, a new golden opportunity arises for American producers to explore new exporting destinations and larger trading volumes amid the west's boycott of Russian oil and gas. I have been arguing for years that responsible pricing will deliver, but the crucial market share will always be the domestic gas-fired electricity generation amid the energy transition. So every oil and gas company should work hard for a cleaner output. Renewables and nuclear are looking strong.
We want to continue selling rallies on exhaustion until we reach a seasonal floor later in May. We have to operate with surgical accuracy on near-term charts as the downtrend has lost its aggression. Then we will be looking for a winter uptrend while we will be trading the autumn contracts in larger volumes. The US macro data are looking bad lately. The US dollar against majors will have to be monitored routinely. Daily, 4hour, 15min MACD, and RSI point to entry areas.
