The January Natural Gas (NGF25) trading session settled at 3.467 (+0.024) [+0.70%], a high of 3.528, a low of 3.390. Cash price is at 3.355 (+0.221), while open interest for NGF25 is at 314,592. NGF25 settled above its 5 day (3.417), above its 20 day (3.148), above its 50 day (3.270), above its 100 day (3.373), below its 200 day (3.588) and below its year-to-date (3.626) moving averages. The COT report (Futures and Options Summary) as of 11/19 showed commercials with a net long position of +155,348 (a increase in long positions by +4,308 from the previous week) and non-commercials who are net short -158,349 (a increase in short positions by -2,924 from the previous week).
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Reuters reported that Russian gas monopoly Gazprom is planning for 2025 with the assumption that gas transit to Europe via Ukraine will cease at the end of December of this year. This follows Ukraine’s announcement this morning that it plans to terminate the current transit agreement, which has been in place for over 50 years and facilitates the flow of gas from Siberia to central Europe. However, Ukraine has expressed willingness to discuss the possibility of allowing gas transit from other suppliers through its pipeline system if requested by other European nations.
Yesterday, Donald Trump announced on his Truth Social platform that, upon taking office, one of his first executive orders will be to impose a 25% tariff on all products imported from Mexico and Canada, as well as an additional 10% tariff on goods from China. Not yet set in stone of course, but this could drastically affect Canadian oil and natural gas imports. If this does come to pass, I think you could expect to see energy prices rise across the board. The U.S. Dollar Index closed higher by +0.08% and the three major stock indexes all closed higher.
In a televised address Israel’s Prime Minister Benjamin Netanyahu recommended that his cabinet approve the American and France backed ceasefire agreement with Lebanon’s Hezbollah, and just a few hours later, the cabinet approved the deal. Regarding Hezbollah’s benefactor Iran, Netanyahu did say that “The ceasefire allows us to focus on the Iranian threat”. From the White House President Biden said “Under the deal reached today, effective at 4:00 a.m. tomorrow, local time, the fighting across the Lebanese Israeli border will end,” adding that “This is designed to be a permanent” ceasefire, and that Lebanon had officially agreed with the deal.
Travel Group AAA predicts up to 80 million Americans will be traveling for the Thanksgiving holiday, the 80 million figure is a 1.3 million increase compared to last year. The Transportation Security Administration (TSA) said last week it expects this Thanksgiving to be the busiest Thanksgiving travel period on record, with an estimated 18.3 million people being screened in airports, which is a 6% increase over last year.
A “La Niña” winter wave is making its way across the Northern Hemisphere year. With temperatures to plummet across America this Thanksgiving week. Meteorologists are forecasting that this will be a colder and more sustained winter than the milder temperatures the Northern Hemisphere has experienced over the last few years.
According to sources close to President-elect Trump’s transition team, it is said Trump is planning to introduce an energy policy bill that will greenlight LNG export projects that were previously blocked by the Biden administration within the first few weeks of his presidency. However, experts forecast that it may take until 2027 for these projects to impact global supply.
Price Thoughts – $3.60 is a key price, in my opinion, settling above could signal upward momentum and push the market to $4, settling below $3.44 could trigger a further sell off to $3. To the upside the 200 day moving average is 3.588 and is my current resistance line, while the 50 day moving average is $3.27 and we have seen some support just above that line at $3.32. The seasonal charts would show you that there’s downward pressure facing the January contract, in my opinion. However, such bullish fundamentals as the “colder than in years past” temperatures in the Northern Hemisphere, the lack of Russian LNG exports to Europe, the geopolitical situation in the Middle-East (specifically what could happen with Iran), the Russia-Ukraine war, and President Trump’s proposed 25% increase on Canadian goods (which one could assume includes Canadian energy products) are propping prices higher, in my opinion.
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Jim Rinaudo
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