Natural Gas on the Nymex had a volatile week before closing 2.4% higher than the previous one at $3.36. EIA reported on Wednesday a rather bearish draw for this time of year of only 2 Bcf in working underground stocks for the week ended November 22. Total inventory is currently at 3,967 Bcf, 3.5% higher y/y, 7.2% above the 5-year average.This market for the latest few months had a lot of trouble overcoming all previous resistance coming from the $3.50 level, which, back in July, we already had identified as our seasonal ceiling. We now want to sell any rally on exhaustion as the post-winter downtrend is coming into play. Next shoulder season’s Put options must now get their final appreciation be ordered on – time on the secondary market. The American economy is in really good shape, thanks also to lower energy prices. The S&P 500 and the Dow reach new record highs, so any further short – term use of this market for hedging activity from across the board on end-of-year trading, will be limited. For another couple of weeks, we must respect the the Daily momentum, so any selling operation must start after the next MACD crossing.More and more people from the scientific community, in the US and abroad, are concerned about the possibility of an increase in LNG use, the most environmentally harmful form of natural gas. I believe that there is no possibility that American LNG will pass easily, especially in Europe, even if some European politicians, recently, have been trying to equalize possible tarrifs, that the new president-elect is thinking of putting on European products by purchasing more LNG from the US. The reality is different. The European Union has quickly lost its appetite for new fossil fuels. Natural gas consumption is down more than 20% in the E.U. since 2022. New projections make it clear that too many European LNG import terminals could remain idle by 2030. Maybe even two-thirds of them. I have been warning about this development since the spring of 2022. U.S. producers must, at all costs, focus on the domestic consumption and pipeline transition, using the pricing as the last tool for this commodity to offer energy security and tie up a fair electricity generation market share for the years to come, amid increasing competition from other forms of energy. U.S. macro data and the Dollar Index must be routinely monitored. Daily, 4hour, 15min MACD and RSI are pointing to entry areas.(Click on image to enlarge)
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Natural Gas: In Downtrend
