Natural Gas Week Ahead - Sunday, Dec. 9

The Natural Gas market on the Nymex had a volatile week before closing 2.70% lower than the previous one at $4.48. Friday’s storage report confirmed a 69 Bcf withdrawal which is average for a week in late November, yet pushed the price significantly higher on Friday with larger trading volumes.

Price is moving back and forth inside a typical range bound between $3.90 and $5.00. These levels look sustainable as seasonality is already integrated on price. A breakout is always lurking however, at this time of year, on speculation and hedging of various market participants.

Weather for the coming week will remain colder than normal in most of the Lower 48 and demand will be high. We prefer to restart selling the short term rallies, on exhaustion, while keeping in mind that anything close to $4.00 will look low for this winter.

If we don’t see the price close to $5.00 in the coming month, then a bearish sentiment will again take over for the longer term, while trading the spring contracts on abundance of proved reserves and record high production, filling any export desire of U.S. Natural Gas producers and temporary shallow working underground stocks compared to the five-year average. We like to trade any 4 hour to 15 min reverse. Trading volumes, MACD and RSI indicating our entry and stop frames. 

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