• 2 minutes U.S. Presidential Elections Status - Electoral Votes
  • 5 minutes “Cushing Oil Inventories Are Soaring Again” By Tsvetana Paraskova
  • 7 minutes United States LNG Exports Reach Third Place
  • 1 hour Joe Biden's Presidency
  • 40 mins The World Economic Forum & Davos - Setting the agenda on fossil fuels, global regulations, etc.
  • 4 hours Biden's National Security Director vows to release report on Khashoggi murder. Is it time to add to Brent futures long position ?
  • 41 mins The Debate Starts : Remake Republican Party vs. Third Party
  • 3 hours Rejoining Paris Climate Accord is Devestating
  • 34 mins Biden suspends oil and gas drilling on Federal Lands for 60 days for review.
  • 7 hours A Message from President Donald J. Trump - 5 minutes from The White House directly
  • 11 hours An exciting development in EV Aviation: Volocopter
  • 11 hours JACK MA versus Xi Jinping
  • 1 day Did I Miss Something?
  • 1 day Investments worthy in versatile and clean natural gas
  • 1 day https://www.prageru.com/video/whats-wrong-with-wind-and-solar/
Editorial Dept

Editorial Dept

More Info

Premium Content

It’s Time To Get Back Into Natural Gas

On October 18th, I wrote a piece here suggesting buying natural gas futures (NG) at around $2.35. That was based on a major technical signal known as a golden cross, where the 50-day moving average crossed over the 100-day. That worked out well as, after a short dip that didn’t reach the proposed stop level, NG climbed, hitting $2.90 a few weeks later before turning again. The idea was to institute a fairly tight trailing stop on a break of $2.40 and if you did that, it was a good trade. You would be out by now though, and I have left the subject alone during the retracement…until now.

As I said, the trigger for that trade was the crossover, but it was also backed up by some fundamental factors, most notably being a leveling off of U.S. production of natural gas. It is not that output isn’t high, it’s just that the rate of growth has slowed. That was almost inevitable. As cheap and accessible as natural gas has become, a sustained period of low prices had to have an effect at some point. The depth of the impact was illustrated this week when Chevron (CVX) announced that it was taking a $10 billion charge in their Q4 earnings related to writing off some natural gas assets.

That was seen as bad news initially by the futures market, but interestingly, prices recovered quickly and are now above their level at the time that announcement came. The bounce-back makes more sense than the drop and can be expected to continue. CVX was the first…





Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News