Natural Gas futures on the NYMEX tried to bounce last week, closing 2.5% higher than a week ago at $2.85. EIA confirmed on Wednesday a withdrawal of 18 Bcf in working underground stocks for the week ending November 20. Total inventory is currently at 3,940, 8.9% higher y/y, 6.8% above the 5-year average, just below the 5-year maximum. Both percentages are in the ascendant since the beginning of the withdrawal season.
The price has naturally tried to bounce after it had slipped hard and fast in the last couple of weeks as the post-winter downtrend began. The pace of reduction in underground storage will be key for the weeks to come. Colder weather must offer some kind of price support as the consumption for heating and electricity generation will continue to pick up. Total demand is really low currently compared to last year although last week's rise is looking promising enough.
A positive Daily MACD crossing is needed for this bounce to be sustained for a few weeks. It looks less probable since Wednesday. We are going to sell any bounce and rally on exhaustion as it is more likely that any kind of green volume will be punished right away on seasonality. Without any extraordinary winter outcome, the market's sentiment will be negative at least until the next shoulder contracts. We have no interest whatsoever in buying Natural Gas at this point.
The United States is facing two long months ahead amid COVID resurgence. The recovery slowdown is inevitable. New contraction is very probable. U.S. macro data and the Dollar index to be routinely monitored. Daily, 4hour, 15min MACD and RSI pointing entry areas. 