Showing posts from January, 2023

Natural Gas Inflexion Point

 Natural Gas Collapse; It HAS been warm out..and a recession IS pending , here in the EU and China. The USD has been extremely strong.  AND the EU long ago achieved targeted Nat Gas storage levels of 80% of capacity (more on that later).  So, all in all, A LOT of bearish factors for NG...all at once following massive bullish fundamentals. Markets, given a little time, do a pretty good job of discounting known knowns. And then some.  Russia invaded the Ukraine on Feb 24 2022 and 6 months later the NG 1 contract topped on August 23 at 10.03.  The EU mandate to fill storage to 80% of capacity was reached August 15. They hit 93% in November. Storage levels in the EU are at 83% and will rapidly decline over the next 2 months to under 50% of capacity ( based on 5 year averages).  NG seasonal history suggest buy support beginning mid Jan/Feb into mid Jun. Since the Aug high Nat Gas has declined $6.52 in a 3 wave pattern over 5 months. Premiums for LNG into NW Europe vs Asia are now flat. By