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Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,057 since Dec 2013
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Weather at this time of year is all that counts! If you think futures are down you should see the physical!
On Friday "Balance Month" Henry Hub traded as high as $7.65. On Monday it had a range of $4.60 to $5.75. First trade today was $5 and now it's trading $3.24. So down 58% in two days!
Liquidity can matter because as it means that the spread is most likely to be wider. So for a small time retail trader these extra costs can hurt you even more, especially if paying a higher RT commission than an institution.
So is NG the same as Oil in terms of the fundamentals? Basically storage (the EI reports) and geopolitical (war/supply disruption etc). Is there anything else to look out for-does one country have the ability to move prices with a surprise announcement I.e. Russia?
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,057 since Dec 2013
Thanks Given: 4,399
Thanks Received: 10,225
If your talking about US Henry Hub Contracts (CME's "NG" or ICE's "H") then it's far less subject to geopolitical factors than oil. US is a net exporter of NatGas (although New England is an importer in Jan & Feb), and how much it can export is constrained by LNG terminal liquification capacity, so changes in international LNG prices have far less of an effect on domestic prices than say oil. So what does drive prices? Well obviously supply and demand. In the short term this is best represented by weather expectations and storage levels. US production exceeds demand April through October, but falls short of demand November through March. Hence the market is very seasonal, and extremely dependent upon storage. In the long term, production expectations, power generation mix and export capacity are important.
If your talking about Europe (UK NBP, Dutch TTF etc) that's not my area of knowledge.
Been away from the markets for a week. Just saw the natural gas price and was shocked to see $2.00.
I have been following the natural gas market for about a year now and interesting to the temperature to natural gas price dynamics happening. The east coast and west coast are about average as far as temps and the Midwest and South are warm with no cold weather in the country at the moment.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,057 since Dec 2013
Thanks Given: 4,399
Thanks Received: 10,225
It's cooled off a little. This is what it looked like a week ago. Got to remember that below normal in AZ is still warm while above across the Midwest completely changes the demand. (Although below normal in UT and CO is probably pretty cold! Not many people live there though hence why the population weighted degree days look the way they do.)
This is what the price of NatGas has been at Henry Hub for delivery next day....
The 4 day MLK weekend, which printed $12.97 severely distorting these numbers/charts
Average YTD $3.71
Median YTD $2.60