Natural Gas futures on the NYMEX had a volatile week before closing 2.8% lower than a week ago at $2.69. EIA confirmed on Thursday a rather average withdrawal for this time of year of 98 Bcf in working underground stocks for the week ended February 26. Inventory is currently at 1,845 Bcf, 13.1% lower y/y, 8.8% below the 5-year average. Both percentages have been finally looking bearish lately amid colder weather but we are only a month away before the new refill season begins.

We have been selling rallies on exhaustion since November and we have only recently considered this latest $3.00 move as another selling opportunity. Price had found its seasonal ceiling last November. The post-winter downtrend is set to continue. The sentiment is not the same for every market participant. Many major banks have been pushing for a premature $4.00 market. Since last summer they are behind many so-called private operators as they seized assets amid the industry's consolidation. They have rolled-over a big amount of debt in their favor. We had first talked about this price move as early as October. The seasonality feature of this market was not to be twitched by external factors. Domestic consumption is so important. The latest refill season ended with 30% less demand for Natural Gas in the United States y/y. With OPEC+ currently giving another hand in U.S. shale oil producers, even the associated-gas production decrease is no longer in play. Rigs keep on coming online while production has been keeping pace with demand comfortably.

We still need to see lower resistance on this channel trading. A level at $2.60 will make us look for even more selling opportunities towards $2.25 and lower lows. RSI has been looking oversold lately, range- bound behavior is very probable. The market is in desperate need of buying volumes. Following the shoulder contracts, Dog Days demand in summer will offer a nice benchmark for the coming winter when $4.00 gas might be looking attainable by then, offering new seasonal buying ideas on directional trading. We are not there yet. U.S. macro data and the Dollar Index to be routinely monitored. Daily, 4hour, 15min MACD and RSI are pointing to entry areas.