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Natural Gas

Is the Price of Natural Gas Forming a New Trend?The US Energy Information Administration said on Thursday that natural gas inventories in US storage rose by 18 billion cubic feet in the week ended Aug. 18. That was below the 29 billion cubic feet increase forecast by analysts polled by S&P Global Commodity Insights. It is possible that market participants thought that insufficient filling of storage facilities will lead to a rise in gas prices in the coming winter. According to the forecast of the International Energy Agency (IEA), the price of gas will peak at USD 3.44/MMBtu in December 2023 (approximately +36% from current levels). The natural gas price chart shows that: → in July-August, a series of rising supports was formed; → the peak of August is higher than the peak of June, which in turn is higher than the peak of May. A sequence of higher extremes could indicate that the market is in an uptrend that could bring the price closer to the IEA's price targets. The nearest resistance on this way is the level of 2.78, which in July-August repeatedly influenced the price dynamics. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
FXOPEN:XNGUSD
by FXOpen
NatGas - No Moon Until DoomIn mid June, I had made a call that Natural Gas was about to rally, because price action and timing supported a move upwards. Natural Gas - The Girl Who Hopes You Remember Her But that call became abandoned as I enlightened and improved further, and began to note that rallies were sold off and lows kept being taken. The trade degenerated into looking at a sweep over $3 and then a sweep over $2.9, and turned into abandonment. Before we go far, I want to tell you that you need to keep your eyes on the situation with China. The first thing you notice is that the propaganda machine and politicians are rarely going after "the Chinese Communist Party" but are always going after "China." This is very strange. China is the world's only 5,000 year country and holds the largest population. If you think about it even a little bit, the CCP would be so easy to topple, wouldn't it? Considering the Party has killed a magnitude more of its own people in its century of murder than Hitler did among all races during his years of insanity. And the CCP and former Chairman Jiang Zemin have the 24-year persecution and organ harvesting genocide against the Falun Dafa spiritual practice hanging over their head like the blade of a guillotine. You have to keep this in mind and go study it. A really crucial part of the puzzle is that Xi Jinping, for all the criticism and targeting he gets/deserves, has never persecuted Falun Gong. Instead, Xi's Anti-Corruption Campaign has been killing and ruining the Jiang Faction minions who have conducted and operated the persecution. Xi has even protected Falun Gong in Hong Kong after fortifying his rule there with the National Security Law following the 2019 Heaven Will Eliminate the CCP protests. All of this matters very much to the fossil fuels industry because there's a relationship between China and Russia, both in terms of production and demand, that changes greatly if something like the Ukraine War ends or drama over Taiwan suddenly enters nuclear brinkmanship. Looking at current monthly bars, Natural Gas shows some kind of "Bear Flag." What you're seeing, really, is an extended consolidation. This is actually potentially really bullish, to the upside, but we need price action to confirm it's time to go. Unfortunately, July did not show us this. The sweep of the $2 point and the lows in April was not enough to springboard the move, and that's really telling. While many may tell you that natural gas is obviously going to a zero-handle, a look at the yearly bars shows such a thesis really does not make sense. To the contrary, the 2020 pivot should, actually, hold. A classic super long term breakout and retrace. Moreover, $10 was printed for literally one day in 2022, and that's very strange. The problem with the moon turning full right now, is shown on 3 month candles, where this current little red blip only has one month left. This is not a bullish continuation. It's important, in a bullish scenario, to see volume come in and price action to correspondingly reflect that producers want to sell at higher prices and will orca the waves for us normal people. Moreover, in terms of the overall markets, as I post in this week's SPX call, we may be watching the equities/indexes bear market rally top for real. SPX - The Sound of a Shattering Iceberg As for what might be the news driver that harbingers the correction, it may very well be one of the 10 largest banks in America dumping for whatever reason emerges (watch out for commercial real estate): Charles Schwab - The Harbinger Of The Next Crisis? I also posted last week that it seems to me oil is about to head for a literal 3-handle. Oil - A New Long Leg Down Soon Begins And because we have problems with "Taiwan," which is to say the International Rules Based Order's desire to take over China via Taiwan while the Chinese Communist Party falls, I also believe that Taiwan Semiconductor (TSM) is set up as a probable long hedge through to the end of the year and into 2024: TSM - Taiwan, Your Semiconductor Long Hedge Now, in terms of natural gas ranging like it has, sharply dumping, and then beginning a new and major bull impulse, this is not without grounds, for this would be a fractal of the 2020 COVID dump-to-recovery play that saw a doubling into year end: If this were to play out, we'd see something like $1.60 natural gas into $4.8 by the end of the year or Q1 2024. After that, we may really see prices that exceed $10 and begin to flirt with all time highs at $15. The fundamental factors that would cause a 10 bagger on a commodity that literally equates to most of the world's electricity production are fairly significant. Especially considering "climate change" (lol "climate boiling") is attempting to be used as the pretext/excuse to export the Jiang-CCP Zero COVID social credit system worldwide in a way that far exceeds what was done during the pandemic. And so for the call, I would say the "short signal" with the markets hanging out in thin air at present, while we're about to begin a new quarterly shift, is a break of the $2.4 level. You'd want to short that break with a target meaningfully under $1.8 and then cover it without getting greedy. At that point, it's time to look for longs, and if you're a long term position trader, this may be one of the best opportunities you'll come across. But it may not really unfold until next year. And this assumes that my analysis is correct. Right now, daily price action is just showing failure swings, but nobody has stepped in yet to give it the push down the stairs it really needs.
NYMEX:NG1!
by LordWrymouth
32
Natural Gas from Pipelines to PortfoliosNatural gas was once considered a byproduct of oil production. It is now becoming increasingly important as one of the cleanest burning fossil fuels and a key piece of the clean energy transition. Today, it forms the backbone of global energy production. This paper delves into the supply and demand factors affecting natural gas prices and proposes a long position in Henry Hub Natural Gas Futures (NG1!) to harness gains from seasonal price trends with an entry of 2.484 with a target of 3.099 and a stop loss at 2.172 delivering risk/reward ratio of 2x. Natural Gas Supply and Demand Supply Largest producers and exporters of Natural Gas are US, Russia, Iran, China, Canada, Qatar, Australia, Norway, and Saudi Arabia. The standout in the list is Russia. Following the conflict in Ukraine, gas exports from Russia plummeted 58% in 2022. This led to price shocks in EU natural gas (TTF). US supply is unable to adequately bridge this deficit as transporting natural gas using ships requires converting it to Liquified Natural Gas (LNG) and using special refrigerated vessels which is not economical for large quantities of natural gas. This is also why the spread between EU and US natural gas is much wider than EU and US oil. Notably, US shale reserves have a high concentration of natural gas. Along with newly developed fracking techniques, this has led to increasing gas production in the US. Moreover, natural gas is also obtained in the process of oil extraction, which means gas production is linked to oil production. This has interesting ramifications when looking at present supply. Despite low natural gas prices over the past few months, production in the US has remained high as a result of high oil production. Similarly, higher prices do not readily translate to higher production. This suggests that Natural Gas price-supply relationship is inelastic. Demand Demand for Natural Gas comes from: • Energy Production – Natural Gas is used in power plants to generate electricity. Natural Gas electricity production has been rising over the last decade as it replaces Coal. Notably, manufacturers using natural gas as an energy source can switch to other energy sources during price spike, which provides some elasticity to demand. • Commercial and Residential Heating – Natural Gas is used for heating homes in winter. This can lead to a seasonal demand during winter months in the Northern Hemisphere. • Industrial Use – Natural Gas is used as a raw material for industrial products such as plastics, ammonia, and methanol. Natural gas demand is heavily affected by weather. Unusually warm summers in the Northern Hemisphere drive higher energy usage from air conditioners while colder winters drive higher demand for heating. Inventories Gas can be injected into storage facilities and stored for later use. These inventory levels play a major role in balancing supply-demand. Summer months (April-October) are referred to as injection periods while winter months (November-March) are withdrawal periods. Inventory levels help even out the surge in winter demand. However, natural gas is much harder to store than oil as it is less dense. This means the inventory effect is not as apparent which explains the larger seasonal variation in natural gas prices as compared to oil prices. Seasonality in Natural Gas Prices Seasonal price action of Natural Gas shows two distinct price rallies. A large rally during winter in the US and EU driven by surge in supply for heating in winters, during this period, prices peak in early-December before declining. The other, smaller spike is during summers in the US and EU when demand for electricity rises, during this period, prices peak in early-June before declining. Further, prices show the highest deviation from the seasonal trend in late-September. Over the past five years, the winter rally has become wider, with prices staying elevated from August to early-December. Additionally, seasonal trend points to a price appreciation of +11% between September and December. However, investors should note that past seasonal trends are not representative of current or future market performance. Henry Hub Futures Henry Hub is the most prominent gas trading hub in the world. It is located at the intersection of major on-shore and off-shore production regions and connected by an extensive pipeline network. This is also where US natural gas exports are dispatched. CME’s benchmark Natural Gas futures (NG) deliver to Henry Hub and is the largest gas futures contract in the world. Other notable Natural Gas futures contracts are TTF (EU) and JKM (Asia). Futures from both regions are also available for trading on CME. Asset Managers are Bullish Commercial traders are heavily net short on Natural Gas futures, short positioning in July was at its highest level since 2021 but has since reduced. Overall, net short commercial positioning points to bullish sentiment. Asset managers have switched positioning in Natural Gas futures from net short to net long since May. Last week net long positioning reached its highest level since May 2022. Options markets OI points to a neutral market view on natural gas with Put/Call ratio close to 1. Options P/C has stayed close to 1 for the past 3 months. At the same time, Implied Volatility on Natural Gas options has been rising in August. A rally last week failed to break past a key support level but vols remain elevated suggesting that price may retest that level again. Henry Hub Gas Dynamics with European Gas Last week, EU Natural Gas futures (TTF1!) spiked by almost 28% due to a strike at Australia’s second largest LNG plant, still the rally soon retraced almost entirely. LNG supply disruption, especially at the key transition to the winter season can lead to volatility spikes. Though, EU gas inventories are 90% full, supply disruptions like this can still have a major effect on gas prices but especially on volatility. Over the past few years, higher flexibility and capacity in the global LNG supply chain has led to the various global natural gas benchmarks tracking each other more closely. This means that Henry Hub natural gas futures are exposed not just to US and Canada Natural Gas production but also to disruptions in global supply. However, the effect is comparatively limited due to ample supply in the US. This can be seen in the price action of Henry Hub natural gas futures which rose by 6% on the same day. Recent Trend in Natural Gas Inventories As per the EIA, Natural Gas supply fell 0.1% WoW last week. At the same time demand rose by 0.3% WoW. Note that working natural gas in underground storage has started to flatten over the past 4 weeks, rising by just 94 billion cubic feet (BCf) compared to the 5Y average increase of 140 BCf during the same period. Still, inventory levels are close to the top of their 5-year maximum, elevated by high US gas production during the summer driven by higher oil production. EIA forecasts that the depletion season will end with inventories 7% higher than their 5-year average. EIA expects production to remain flat for the remainder of the year, so watching weekly consumption reports could point to early indicators of seasonal inventory depletion. However, due to elevated inventory levels, the seasonal effect may not be as strong as prior years. In a longer-term trend, gas rigs in the US have started to decline this year after surging over the past year. This will likely lead to lower production over the next year. Trade Setup With options markets pointing bullish and seasonal trends suggesting price appreciation during this period, a long position in Natural Gas futures expiring in October (NGV) allows investors to benefit from an increase in Natural Gas prices. Each contract of CME Henry Hub Natural Gas Futures provide exposure to 10,000 MMBtu of Natural Gas while the October contract has maintenance margin of USD 5,070 for a long position. A USD 0.001 MMBtu change in quoted price per MMBtu leads to a PnL change of USD 10 in one Henry Hub Natural Gas Futures. Entry: 2.484 Target: 3.099 Stop Loss: 2.172 Profit at Target: USD 6,150 Loss at Stop: USD 3,120 Reward/Risk: 2x MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
NYMEX:NG1!Long
by mintdotfinance
17
Dry Bulk Shipping ETF to Rise as Export/Import Prices IncreaseBDRY the Dry Bulk Shipping ETF, which is tied to the Freight Rate Futures Contracts of the Various Ship Sizes, is now looking to rise again as both the Import and Export prices continue to rise, especially within the Natural Gas and Fuel category. We have Confirmed Bullish Divergence on the RSI, MACD, and PPO; all while the PPO has begun to give us a Bullish Confirmation at the HOP level of this Bullish Deep Gartley on the Weekly Timeframe. As a result, I will now be expecting to see the market price of this ETF go up at an extreme rate as the Shipping, Freights, and Carrying Costs begin to rise. I will be looking at individual Dry Bulk Shipping and other International Goods Transportation stocks such as ADM, GASS, and DLNG
AMEX:BDRYLong
by RizeSenpai
#NatGas UpdateNatGas is nowhere close to expectations. Here it is purely my fault for not looking for alternatives hard enough. In hindsight, the situation was not that difficult to prepare for. Initial wave (a) of the remaining 2023 uptrend seems complete (unless it is a diagonal). The price is likely to spend next month consolidating before rising in wave (c) of (y) of 5 of (1). Having missed that move in wave (a), it makes little sense to label lower time frames until wave (b) is fully formed or the price renders the analysis wrong.
OANDA:NATGASUSD
by Fomenka
BOIL rises into reversal territory SHORTBOIL as a triple leveraged ETF of natural gas futures- has high volatility which can translated to high profits for traders who can accurately harness that energy .On the 2H chart in the time since the reverse split, the price has mostly ranged up and down between the first upper and lower VWAP lines of the VWAP anchored to the high in May. Occasionally it has ranged outside those bounds and then reverts to the mean VWAP. Price is presently at or near the first upper derivation line where it typically pivots down. The zero lag MACD is suggestive of an impending pivot down before any signs of it and thus showing bearish divergence. The mass index is not yet suggesting a reversal. The shorter HMA 56 rising significantly above the HMA210 is suggestive of overextension into the overbought overvalued zones of the chart. Overall, I will put BOIL on watch. Once a reversal is confirmed I will either short BOIL or long KOLD. Leveraged funds being what they are and mathematics fixed and hard, shorting a levearged ETF is a faster fall than its rise so the short position will be my first choice.
AMEX:BOILShort
by AwesomeAvani
10
Energy markets top of mind – got gas?Energy markets are front of mind – we see crude into new cycle highs and riding the 5-day EMA – clients are progressively increasing short exposures, although we’re not at historically high skews. Nat Gas (NG) – the wild west of energy markets – has broken the $1.91 to $2.82 range it has held all year, and the Bollinger Band volatility squeeze is firmly on. EU TTF NG prices were a clear driver, with price closing up 28%, and along with US CPI, will be front and centre in the session ahead. Gasoline has moved to range highs of $3.00 and could get more attention from clients, if and when it closes above the highs. The fundamentals behind the NG move have been firmly debated and whether the potential worker's strike at the Chevron and Woodside LNG facilities has genuine longevity – the three facilities in question account for c.10% of global LNG supply, so it is significant. The risk to NG longs resides in a quick de-escalation of talks and we ultimately see no impact on supply. Married with signs of a mild winter in Asia and LNG not far off capacity limits, we could see a sharp decline in price on a resolution. Conversely, if we do see a full escalation and the market feels it could play out over a period of weeks, longs will be sitting pretty. The trend-following crowd would be triggered on NG, with price closing above the Bollinger band and Donchian Channel (40-day look back). This still needs work, but the fact we’ve seen a breakout has raised the prospect of a test of the 200-day MA and full trending conditions. Looking at the intraday tape in the US500 we see that as crude prices pushed above the April highs, we saw little selling of equity. We also saw the market's pricing of expected inflation (through ‘breakeven’ rates) also falling. This goes part of the way to answer two important questions – the level where higher energy prices accelerate the view that headline inflation may reverse higher again. And, whether higher oil prices become an outright negative for equities. It appears that while we are closer to that tipping point, it feels like it may take a break of the psychological $100p/b to change the risk dynamic. For now, longs in Nat Gas seem the right position, knowing the clear near-term risk/catalyst is headlines on strike action in W.A.
PEPPERSTONE:NATGASLong
by Pepperstone
1
UNG Testing Complex Inverted H&S NecklineUnited States Natural Gas Fund(UNG) is testing the neckline of a complex inverted head and shoulders pattern with an open and close above the neckline on a gap up in price today. Based on the orange line measurement taken from the lowest point of the head to the neckline we get $1.89 which can be applied to the opening price today above the neckline and gives an upper price target of $9.92 to watch for which is in the same area as the red horizonal resistance level stemming from the early march spike up to and rejection from $10. Inverted complex H&S patterns have a 71% success rate which means we multiply $1.89 by .71 to give us an initial upper price target of $9.33. Assuming that we have a successful breakout of the neckline to confirm the inverted H&S pattern profit-taking should be begin at the $9.33 level and peak in the $9.92-$10 range for short-term traders. Personally, I tend to just raise my stop-loss level as price moves higher rather than selling at the upper targets in case price continues to move above the projected targets. This gives me wiggle room for price to fluctuate at resistance/target levels while also ensuring that the trade is profitable should price reverse and I get stopped out. The lower PPO indicator shows the green line rising after crossing back above the purple signal line which indicates short-term bullish momentum. Both lines trending above the 0 level indicates intermediate to long-term bullish momentum. The lower TDI indicator shows the green RSI line rising above the 60 level which indicates short-term bullish price trend. The green RSI line is also trending outside of the upper white Bollinger Band which indicates extreme bullish price trend; generally you want to remain long when the RSI is trading outside of the upper BBand. Price tends to correct to the downside when the RSI line falls back below the upper Band so keep an eye on that when it happens if you are are short-term trader. Overall, when the RSI is trending between the 40-80 levels as it has been sine mid-June the the intermediate to long-term price trend is considered bullish. Overall, UNG is looking strong with bullish trend and momentum indicators as the price of Natural Gas moves higher along with crude oil. My buy price was $6.93 putting me up about +15% on the trade so far. Stop-loss is still sitting at $6.54 which is where I set it the day I bought, likely will move it somewhere around $7.50 tomorrow to keep me in profit should price reject at the neckline. Should price continue seeing strength this week the stop-loss will be moved closer to $8, just below the neckline. Info on complex head and shoulders bottom patterns: www.thepatternsite.com
AMEX:UNGLong
by PrepForProfit
NATGAS Breakout, Testing ResistanceNatGas is up +7% this morning as price has breached local resistance near $2.90 and testing long-term resistance near $3. Should price beat the $3 level the next move will likely be up toward the 200-day moving average which rests near $3.40. The PPO is reading short-term bullish momentum with the green PPO line crossing up through the purple signal line after both lines held above the 0 level on a recent pullback. Both lines trending above the 0 level indicates intermediate to long-term bullish momentum. The TDI indicator shows the green RSI line trending above the upper Bollinger Band and rising above the 60 level which both indicate short-term bullish trend. Generally, you want to remain long when the RSI line is outside of the upper band, and when the RSI is rising or trending above the 60 level. Overall action in the RSI has been trending between the 40-80 levels since May which is a sign of intermediate to long-term bullish price trend. Overall view on NatGas price is bullish with more gains expected as we head into fall/winter when demand tends to increase.
NYMEX:NG1!Long
by PrepForProfit
Antero Attempting Rectangle BreakoutAntero Midstream is working on its 4th weekly close above the upper line of a rectangle pattern. Price is trading above all of its MAs with all MAs in bullish order indicating a bullish trend for price. The PPO indicator shows the green PPO line rising above the purple signal line which indicates bullish momentum in the short-term. Both lines trending above the 0 level indicates bullish momentum on an intermediate to long-term basis. The TDI indicator shows the green RSI line trending above the 60 level which indicates a short-term bullish price trend. Going forward we want to see the RSI remain above 60 to sustain this potential breakout above the upper line of the rectangle pattern. Assuming that natural gas and oil have bottomed and continue to move higher AM should benefit from the rising trend.
NYSE:AMLong
by PrepForProfit