Natural Gas Week Ahead - Sunday, Aug 4, 2019

Natural Gas on the Nymex had a volatile week closing 1.26% lower than the week before at $2.14. EIA confirmed another 65 Bcf were injected for the week ended July 26 and price immediately moved 7% oppressively lower as this impressive refill season will be extended.

August, however, is the last month were U.S. Natural Gas is contributing in electricity generation for most of the cooling, always at half the winter’s heating demand. We like to sell rallies for the last few years on shorter period charts and at the time that Dog Days will soon retire, we will get a feel for this injection season’s floor.

This area will also provide a benchmark for winter contracts and although 2016 lows are shaping this market decisively, we can’t expect any more downturn from now on until the coming Winter season. Good news for producers which don’t make enough profit below the $2.50. Weekly MACD looking ready to turn positive in longer period charts for quite some time. We can test buying as soon as the Daily MACD angles positive, until then we won’t go against the market. Oil to gas ratio always to be monitored as the oil market faced a steep downturn lately. Stronger Dollar, rate cuts and new tariff decisions aren’t helping the oil and gas industry right now. Renewable is putting a lot of pressure as well in the fight for market share.

We always keep in mind that in the near past the U.S. Natural Gas industry offered opportunity for hedging and worked, most of the times, as a safe haven commodity to investors, therefore, we feel the bottom isn’t much off below from current price levels. We monitor these macro figures constantly. Daily, 4hour, 15min MACD and RSI offering precision to our entry decisions.

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