Hi Everyone,
Thanks for working with me and understanding. I’ve been very much focused on getting these models trained and perfected for the community. It’s taking a lot of time, so I haven’t been writing as often. Here is my opinion of where we are at, and thing’s I’m considering and watching coming up.
We’ve got some imminent bulish and bearish factors.
Firstly, Supply is still strong. Even with Canada’s exports dropping lower and lower very recently, producers have finally been brining on a lot of their own supply.
It’s caught-up with the lack of supply we’ve had, keeping a lid on bullish moves.
Right now, the storage levels vs 2024 are only -5%, so very very close to catching up.
Vs the 5 year average, we’re +5%.
I’m keeping an eye on the storage vs 2024 levels daily, at this point, we’re getting more and more bearish, taking away most reasons for price to stay high and continue to rally, in my opinion.
Summer demand has been lacklustre, as we knew, and has the models showed many months ago.
I never believed we’d see a warm summer, so far, that’s been true, but that said, Hurricane season is also off to a quite start.
Summer most likely won’t make an early arrival, it looks like we can expect things to remain mostly the same, eventually cooling. However, we could see Hurricane’s make a late entrance, like they did last year.
Russia and Ukraine are back at it again. Russia is struggling to finance the war effort, lacking money, manpower and equipment. Russia is looking to start the 3rd round of peace talks, as they look to cut Military spending. I think this is a fairly strong sign that Putin is looking to wind down. Hopefully, we’ll see peace soon.
If we see peace, I would expect Natgas and Oil markets to fall dramatically. Russian sanctions would likely get lifted, and energy markets would be flooded with Russian supply.
How I see this playing out.
With the exception of any unseen events, war or Trump tweets, I think it’s fair to assume Natgas will continue to gradually chop lower until September. The lack of demand, changing geopolitical landscape, and slowing world economy will eventually drag on Natgas so much, that this “Bull Market” will likely come to a temporary end.
That said, winter 2025-2026 is looking like a repeat of last year.
I’d expect a bit of a bear run for the next several weeks, if Russian events play out, even more so.
But eventually, there will come a time where a bottom will start forming, and buying the dip ahead of winter will make a lot of sense. It’ll likely be a repeat of last year, so US supplies will be tight.
But, if we have peace with Russia, then I can’t really see a reason for a huge $5 rally again. With Russian supply on the market, all rallies will likely be muted significantly.
Without peace, and the war continuing on, I think it’s like we’ll see another run to $5.
There’s a lot going on, things are being a little clearer, but still quite messy. There’s no way to know if something suddenly will change, so be careful with your captial.
My expectation, is we’ll finally break the back of the Bulls and thier Bull run in the very near future.
Once they’ve capitulated, and at the right time before winter, that’ll offer good value to buy.
So over-all, my bias is cautiously bearish, with $2.5 to $2.8 as the target until September / October.
Depending on how things change, looking for a $3, $3.5 or $5 run in winter. Completely dependant on geopolitics. Looking to buy around late September to Mid October.
Thanks everyone.
~Rob