2023-02-22 11:30:00
UN-NATURAL NATURAL GAS
Natural Gas has had a very interesting week especially after the settlement at the $2.4 price zone.This was a major 'bluff' for most speculators I must say.
As we look into the 25 year chart,observation has been;
Whenever Spot price goes below $2, it rebounds quickly.The longest sustained period below $2 is 9 months.
There is a support zone at the $1.8 to $1.6 area being observed here.
A cyclical buying opportunity might just be on the way.
Recall the words of T.Boone Pickens,he stated : You can't invest in Natural Gas on a daily basis,Its too volatile,but if you think of Natural Gas a long-term holding,then you push your profit horizon out.
A long term time horizon would be at least two years.
I've attached a chart of what the back-adjusted continuous contract looks like,correlate it with the statement above and you realise that you can't just buy and hold because the price is low.
Chatter from various platforms suggested a solid 'bottom' however this floor has been shattered several times as last weeks closing price went -7% trading at $2.228 with a high price of $2.420 on the daily charts.
The feeling resonates to 2019, the fall wasn’t as much as a percentage, but we were $4s in October to December 2018 and then basis blew out in the areas we played in and we went sub $2 for most of the year 2019.
Averaged pricing was at $1.65 for the year.
On the Options side concerning #NG ; there are about 30,000lots of Short puts sitting & asking to get picked off from here to $2 as the chart suggests.
This should be some variable to look at as the 'lemon squeeze' is to the last drop.
We have seen what #WTI & #BRENT did some while back,how low can it go ?
We wait for the US Markets to get back online after the Monday holiday for clarity on the matter,quite foggy at the moment.
Sometimes sitting ducks lay eggs too,be patient to get the resolve on the matter.
Good week ahead.
Andy Warr,
TophatFinanceGroup.
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Earlier:
2023, February, 17, 11:05:00
EUROPEAN GAS PRICES WILL BE HIGH
Gas markets are in “better shape than many expected one year ago,” IEA Executive Director Fatih Birol said. “But the reality is that winter 2023-2024 is likely to be the real test.”
2023, February, 13, 13:40:00
EUROPEAN GAS PRICES DOWN AGAIN
Benchmark futures are now trading just above €50, near the lowest levels since September 2021.
2023, February, 1, 12:05:00
EUROPEAN GAS PRICES UPDOWN AGAIN
The cold spell next week signals the possibility of heavier withdrawals from the region’s gas storage sites, though inventories are still almost 73% full and well above average levels of the last five years.
2023, January, 30, 11:40:00
EUROPEAN GAS PRICES DECLINE ANEW
Benchmark futures fell as much as 3.5%. While the continent’s gas inventories dropped last week amid a cold spell, they are still far above historic averages.
2023, January, 23, 12:35:00
EUROPEAN GAS PRICES UPDOWN
Dutch front-month futures, were 0.2% lower at €66.80 a megawatt-hour by 8:58 a.m. in Amsterdam, after rising as much as 3.1% earlier.
2023, January, 20, 11:40:00
EUROPEAN GAS PRICES DECLINE
Dutch front-month futures, Europe’s gas benchmark, were 2.8% lower at €59 a megawatt-hour by 8:29 a.m. in Amsterdam.
2023, January, 18, 12:15:00
EUROPEAN GAS PRICES REDUCTION
The region’s storage sites are around 81% full, some 20 percentage points above the five-year average. That’s providing confidence that Europe will end the winter with inventories over 50% and “more than enough gas to completely replenish its storage by the start of next winter,”
