Natural Gas: Profiteering Makes Markets Uneasy

Natural Gas futures on the Nymex faced another negative week before closing 11.8% lower than the previous one at $6.17. August contract is currently trading at $6.28. EIA confirmed on Thursday a build of 74 Bcf in working underground stocks for the week ended June 17. Total inventory is currently at 2,169 Bcf, 12.3% lower y/y, 13.2% below the 5-year average. Both percentages are on the descending, as we had anticipated. The refill season will end in November, finding the inventory level around 9% below the 5-year average which will be totally fine amid this extraordinary year.

Following the 40% profit we took on the seasonal uptrend, now the market has already given us another 28% on real-time trading on exhaustion, but this is where directional trading is becoming tricky. We need to respect the $5.50 support level until October. The direction of the market remains towards $3.50 for the April '23 contract. Any pricing above the Autumn ceiling of $6.50-$7.00 will get scorned again and again. Range-bound activity however should be seen for another month or so. The market will become thinner in July and August. We are going to call the post-winter downtrend on time. The same ranges will give multiple times the profit while selling any bounce or rally on exhaustion before the break-out occurs.

Vladimir Putin and some of his Arab and Texan friends, along with some of the world's biggest trading offices, are the only responsible for the biggest degradation in the history of the use of natural gas in the electricity generation sector. Even its bridge-fuel status has been under threat lately by irresponsible profiteering.

U.S. 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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