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Natural gas futures on the Nymex had a negative week before closing 6.6% lower than the previous one at $2.80. EIA reported a rather bullish build for this time of year of only 13 Bcf in working underground stocks for the week ended August 21. Total inventory is currently at 3,199 Bcf, 2.9% lower y/y, 5.8% above the 5-year average.

Here we are at the end of the summer demand, and the market could not even break out as expected in the previous couple of months. We have managed to take home a 10% on warmer weather, but at the time when the $3.40 support level lost its influence, the market went south pretty fast, hitting the seasonal floor once again. Supply easily kept pace with demand. The pace of injection into storage remains 20% higher than the 5-year average. A breakout in uptrend, however, is still anticipated on the next winter contracts starting trading at higher volumes. We need to respect seasonality at the beginning of the shoulder season, though. We want to see a clear daily MACD bullish crossing first before starting the buying operations for the next few months on the near-term charts. The RSI has already been looking oversold enough lately.

Natural gas is back in the headlines. The US president acting again as the industry's salesman, is trying hard to convince new and old buyers that the path to energy transition lies in its greater use. It will be a surprise if the numbers of the recent trade agreement with the European Union, the largest market on the planet, are finally verified. This plan has been unrealistic since its conception. The only way Europe could achieve a $750 billion purchase of US energy products over the next three years would be if American producers tripled the price of oil, gas, and coal at the same time. I cannot see a scenario for the European Union letting down its current suppliers so rapidly, as the US's excessive capacity currently does not exist.

Lower interest rates could soon lead to higher natural gas prices because of increased demand, as the US will not suffer too much from an imminent slowdown. I believe that the NYMEX futures will still offer a hedging opportunity for various market participants on end-of-year trading in the coming months and support the price. 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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