Natural Gas Chariot To Swing Low

Intermediate
  • Natural gas collapsed on Friday
  • There is no weather-related buying
  • There is a large build of inventories
  • Target a summer decline to 2.379

Natural gas futures crashed lower last Friday (May 3) as traders who held onto longs acquired between April 23 and 26 succumbed to the clear absence of any weather-driven demand. There was also an overhang of gloom following Thursday’s higher-than-expected U.S. Energy Information Administration’s (EIA) weekly storage report.

natural gas futures

Source: www.tradingeconomics.com , Spotlight Ideas

NatGasWeather said,

“…Most of the weather data favors a very comfortable pattern across the northern U.S. May 12-18 with highs of 60s to 80s, while the southern U.S. will be warm to slightly hot with 70s to 90s. … Upcoming builds will continue to run larger than normal to further improve the supply picture. …” (U.S. Spelling)

On Friday, June natural gas settled at $2.567, down $0.022 or -0.85%.

The refill season started with strong builds at 5-year record input and has already filled 3 times the amount of the 5-year average for the last month.  The market is sagging as this brings the stocks ahead of Summer’s natural increase in demand. The market will therefore have to cope with the excess supply by enduring falling prices within range-bound rotations inside the $2.50 – $3.00 for the coming

months on smaller trading volumes. Any new agreement for U.S. Liquified Natural Gas (LNG) exports is facing very competitive pricing from current providers. For a tremendous example one need look no further than the talks taking place between the U.S. and Europe as it concerns the Russian gas supply.

The conclusion is that any increase in demand will have to be neutralised by competitive pricing as temporary equilibria are sought.

natural gas one month

Source: www.tradingeconomics.com , Spotlight Ideas

The main trend is down; however, momentum may see a little short covering at the opening next week. This will not last long and I expect a move through the 2.477 level will signal a resumption of the downtrend.

Summary:

Sell on any opening push toward 2.59…2.61

Target 1 2.479 … Target 2 2.416 …  Target 3 2.379

Stop at 2.67

Comments on this analysis

Your email address will not be published. Required fields are marked *


Latest News

GBPUSD Chart 2019-08-22
GBP catches a solid bid – breaks above Median Andrew Pitchfork line

Sterling jumped on Thursday after Germany’s Angela Merkel says Brexit backstop solution is possible by October 31st. In response GBP/USD pushed to its highest since late July, breaking above the median line of a bearish Andrews Pitchfork. Close above 1.2249/50 could allow GBP to continue higher, targeting the following key upside levels:  c.1.2335 – Upper … Continued

4 hour DAX
Stock indices poised for more positive signals

A firm recovery tone has been seen across global stock markets since the end of last week, that continued into Wednesday’s release of the FOMC Meeting Minutes, from when the Fed cut rates in late July. This positive price action has been a reflection of a lack of escalation on the trade war and if … Continued

Monthly ESTX 50
DJ EuroStoxx 50 (Eu50) Futures – 20190822

Recap EuroStoxx we wrote: First resistance at 3358/62 but above here allows a retest of 3375/80. A break higher today meets a selling opportunity at 3390/3400, with stops above 3410. We hit the selling opportunity & topped exactly here but no sell off yet to offer a profit on shorts. Daily Forecast – 22 August … Continued

Crude oil daily 2019-08-21
Crude OIL – Triangle Pattern on Energy Points Lower!

Hello fellow traders, A bigger triangle as part of a three-wave A-B-C reversal can be unfolding on crude oil in wave B. Now we are tracking final stages of a triangle, so be aware of a drop once final leg E of a triangle fully shows up. A drop below the lower triangle line would … Continued


Forex Brokers in your location