Natural gas futures on the Nymex had a negative week before closing 5.9% lower than the previous one at $3.03. EIA reported a bearish build for this time of the year, of 64 Bcf in working underground stocks for the week ending September 25. Total inventory is currently at 3,415 Bcf, 3.9% lower y/y and 2.4% above the 5-year average. Both percentages have been descending lately.
After the latest storage report, the November contract got pressured immediately. Since last month we have wanted to see a clear signal from the next support level at $2.90, before starting to buy again. We believe the last 4H chart shows exactly that at a level where we will want to buy any dip in the next couple of months. The uptrend will continue, and we now need to see another clear support at $3.25, which currently acts as a resistance level for this shoulder season. We are going to buy any dip and make profit from the same ranges. We believe that this market will meet its seasonal ceiling in January at around $4.00.
US macroeconomic data have been negative for some time. The latest labor market figures are particularly concerning, as is the housing market. I have written over the past few months that the only factor I trust to bring an end to the war in Iran is high interest rates. Since Trump has been unwilling to pay the price for a quicker resolution, he will be forced to do so indirectly. Flows do not appear to have been significantly affected in recent weeks. Global refining activity has seen an impact of no more than 4%. US LNG continues to struggle to find the desired new buyers. With interest rates remaining high, fewer and fewer market players will be able to engage in profiteering. US macro data and the Dollar Index have to be monitored routinely. Daily, 4hour, 15min MACD and RSI are pointing to entry areas.
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