Market Outlook

December 10, 2018

Keep Buying Natural Gas

Natural Gas prices could spike this winter if there’s a severe cold snap.

Fundamental Analysis

  • U.S. natural gas inventories are currently 20% below standard year ago and 5 year averages. End of October supplies will be at lowest level since 2005, leaving market highly vulnerable to winter supply disruptions.
  • Rapid Rise in LNG (Liquefied Natural Gas). China is pushing hard in their conversion to LNG.
  • Cold winters in Europe or Asia could see a surge in LNG demand. The U.S is fast becoming an increasing large exporter of LNG. LNG is primarily consumed in Europe and Asia
  • An El Nino winter forecast – Weather forecasting is not a perfect science but there already are calls for an old fashion cold winter spreading over much of the country.

Technical Analysis

  • Natural Gas prices are historically cheap
  • Nat Gas prices have already staged an initial upside technical breakout.

 

THERE IS A SUBSTANTIAL RISK OF LOSS ASSOCIATED WITH TRADING FUTURES CONTRACTS.  FUTURES’ TRADING IS NOT SUITABLE FOR ALL INVESTORS.