Great thread keep it up. Nat gas interests me but I have never traded it. The charts scare me, I cant make out any patterns. Will keep reading, thx.
You also want to pay attention to the natural gas number that comes out every thursday at 9:30 AM central time. If you want to catch a big move (or get run over :eek: ) this is the time to do it
I am really surprised at the strength of this move. All the news until about a week ago was how the world was flooded with the stuff, then there was that huge find and next thing I know its is roaring off its lows? Is this just indiscriminate buying of commodities or have the fundamentals changed in the last week?
Hi, I'm not an exert of course The fundamental factors are preety bad. US production is growing significantly thanks to unconventional gas production. The demand is falling further... I do know that some EP companies in serious troubles with regards to LNG marketing efforts There is simple too much gas on the spot market. Personally I couldn't understand the current move upward...Any thoughts or ideas?
I don't see any change in the fundamentals either, but I don't think NG or any market necessarily needs news to reverse directions. Sellers stopped selling, shorts had to get flat, and buy stops were probably triggered.
1. coal has been up a lot 2.big fund in houston was MEGA short and even with big var and hedges etc need to cover sooner or later
The move up is nothing more than a combination of a relief rally after 10 consecutive months of downtrend, and dumb money buying into commodities, following global equity markets higher. Notice the volume on the UNG natty ETF, it has soared and was 400% of avg daily volume yesterday. As stated, the fundamental picture is the worst I have ever seen in my 13 years in natty, we are running 3 BCF/day of over supply against the 5 yr avg, and LNG volumes will be increasing throughtout the summer, offsetting and productions declines that may start. The latest production stats have not had a decline yet, rather it had another month over month increase. Price will be the only thing that can shift the imbalance, so look for sub $3 within 60-90 days (or less), and possibly test of $2.
Not alone, it does provide buying and is a good sentiment indicator for public investment into commodities again as an asset class. It's kind of funny actually, watching dumb money poor into natty without regard of what will transpire in the very near term. I am riding along with some bull spreads at the moment, but make no mistake that this new new length will provide the puking to finally push us under $3. I can't tell you how high we go and for how long, but the longest time period would be the first week of June. On price, I am getting hammered by producers over the last few days wanting to add shorts to their hedging. Just yesterday, I had a producer sell the balance of may swap at 4.07 and bring gas back online that he had shut in late last month. My point is, as price deviates from fundamentals, producer selling will accelerate, providing stronger resistance.