FxWirePro: Daily Commodity Tracker - 21st March, 2022 
Best Gold Stocks to Buy Now: AABB, GOLD, GDX 
 - EconoTimes)
In our previous article, available here, http://www.econotimes.com/FxWirePro-Keep-riding-the-gas-call-review-354108# , we reviewed our long call in the natural gas and suggested that our readers should keep riding the bull. In this piece, we are about to review, whether the fundamentals do provide support to our call or not.
- We have been fundamentally long in the natural gas for quite some time now and that is due to the change in the demand profile. We expect that the importance of the natural gas in the global energy consumption likely to move up and fast. However, that reason may not be sufficient to push the natural gas prices in the short to medium term. Hence we review the inventory position.
We have also warned our readers of the record low injection pace this year to the underground storage.
- April to October is the typical net injection period. In 2012, inventory grew by 4.6 percent week over week in this period. For 2014, it was higher by 4.7 percent. Last year growth was 3.2 percent. But this year so far the growth has been just above 1 percent.
Despite the above, the inventory remains high thanks to previous two weak winters and production efficiency in the previous years.
- Natural gas inventory is currently at 3.8 trillion cubic feet. Underground storages need to have around 1 trillion cubic feet of gas to maintain the pressure that leaves us with 2.8 trillion cubic feet of gas. Now, typical drawdown period is from November to March. So to draw down that inventory in 20 weeks the average drawdown has to be 140 billion cubic feet. Now, natural gas can extend rally even if the total drawdown falls below 2.8 trillion cubic feet but remains above 2 trillion cubic feet.
So, we, in our hand have high inventory but a rally is also possible. So we need to keep an eye on the drawdowns starting November, winter forecast and most importantly, whether the injection improves next year because if not, even with a weaker winter, we could be in for a big rise during the summer.
