Natural gas futures on the Nymex had a negative week before closing 4.3% lower than the previous one at $2.85. EIA reported a draw of 52 Bcf in working underground stocks for the week ended February 20. Total inventory is currently at 2,018 Bcf, 7.5% higher y/y, 0.3% below the 5-year average. Both percentages are steadily ascending.
The market has offered us a double-peak heating season after the latest spike, and we have already been selling the same ranges as we did last December. The sell-off was too aggressive and quick, so we are now trying to sell any rally on a bounce that gets exhausted as well. We prefer operating on the near-term charts. We believe that the market is heading to a seasonal floor later in May of about $2.00.
The latest developments in the Middle East are offering major support for the price of the American benchmark. We saw this in the last couple of sessions of the Nymex when after a bearish report the price held its current support level of $2.85. This will now give us another selling opportunity from a higher range. We first need to see when the 4-hour MACD will start to show bearish. After the US strikes in Iran, this might take another couple of weeks, as the Daily RSI is still looking oversold.
The latest U.S. manufacturing data and the housing market are both looking weak enough. US macro data and the dollar against majors have to be monitored routinely. Daily, 4hour, 15min MACD and RSI are pointing to entry areas.
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