Natural Gas Week Ahead - July 28, 2019

Natural Gas futures on the Nymex faced another negative week amid volatility closing 3% lower than the previous one at $2.17. Thursday’s EIA storage report confirmed another 36 Bcf build for the week ended July 19. This year’s spectacular injection season will be definitely extended. We like to sell rallies on fundamentals while 2016 lows still shaping a longstanding negative sentiment, although short term buying on Daily MACD reverse signal is profitable as we look shallow enough under the $2.50 long term support level and price is bouncing. This Summer’s range steadiness will offer a benchmark position for the winter contracts while trading volumes typically decreasing until September.

Volatility is consistently expected on range bound movements. We cannot buy the longer term unless we see a clear break above the $3.00 which will eventually crop up later in Fall. Next year’s summer forwards looking very negative at this point. U.S. Producers facing significant pressure from renewable in electricity generation market share. Recently Berkeley approved Natural Gas ban in new buildings and other California cities are to follow same legislation. Record high production will keep pace with any new LNG export agreements while some rigs remain offline. U.S. macro figures always to be monitored closely as well as the Dollar against majors. Trading volumes, Daily, 4hour, 15min MACD and RSI pointing entry areas. 4hour RSI already looking oversold.

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