Natural Gas futures on the Nymex had a volatile week before closing 3.4% lower than the previous one, at $5.60. EIA reported on Thursday a rather bearish build for this time of year of 118 Bcf in working underground stocks for the week ended October 1. Total inventory is currently at 3,288 Bcf, 13.9% lower y/y, 5.1% below the 5-year average.

In the past month we have talked about how much contempt we are feeling about any pricing above the $5.00 and the market has already offered us 20% while selling rallies agressively, on exhaustion, as the market has been ranging around the seasonal ceiling. Too many market participants, because of end-of-year trading, have been testing those spikes on near-term use of the market for hedging purposes. And too many of them will have to gear-up for the coming post-winter downtrend. Fundamentals are about to kick in, working underground stocks are now only 5% below the 5-year average, following even a whole year of consolidation. More rigs can come online at anytime, Technically Recoverable Resources are at record high in most parts of the world.

The refill season might be prolonged. Demand for natural gas in the United States is to decrease in 2022. More than 85% of the American gas is being consumed domestically. U.S. LNG exports are irrelevant even at a competitive pricing. The world is changing fast. We have no interest whatsoever in buying this market this time of year, no matter how many more Dollars can be printed. Any spike is to be sold immediately. May contract is currently trading at $3.85 on large volumes already. U.S. macro data and the Dollar Index to be routinely monitored. Daily, 4hour, 15min MACD and RSI are pointing to entry areas.