Henry Hub Natural Gas futures showing slowing momentum

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Henry Hub Natural Gas futures showing slowing momentum across the futures curve up to Jan 2024 ().

Recent geopolitical risks i.e. The Russian invasion of Ukraine, have pushed the prices of both spot and futures of commodities higher.

Natural Gas futures across the curve are tracking each other with a tighter spread till Jun 2023 implying that the market participants expect the prices to remain elevated for a longer time. However in the short-term, the price action shows an exhaustion by bulls forming a ranging pattern with a possibility of a reversal.

Central banks around the developed world highlighted in their Monetary Policy Statements this May that they expect energy prices to remain elevated for the next 18 months. I'll definitely be watching out for the impact of the policy tightening regime - which we are in now - to the demand side of the economy, and it's second-order effects on gas prices.

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Spot prices are showing an interesting pattern. A breakout of the $8 level will expose the $9 - $10 area.

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The CFTC's Commitment of traders shows that the net positions for non-commercial traders moved higher to -112114

The long positions for Money managers fell lower pushing the net positions lower to 11649 for the week ending 10th May.

On the other hand, Producers, Manufacturers, Processors and users increased their long positions lifting the net positions for the contract Henry Hub Natural gas futures to -89922

It's important to note that since March 30th, the net positions have been steadily increasing and if the momentum continues, we could see higher prices