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The Wild Ride For Natural Gas Isn’t Over Yet

Last year was, to say the least, a bit of a wild ride in natural gas. Don’t get me wrong…I’m not complaining. I was always taught that volatility is a trader’s friend if for no other reason than that you can’t make money on something that doesn’t move. Still, a commodity that more than doubled in a four-month period before topping out and giving almost all those gains back in the next two months is a bit more volatile than a lot of people can handle. So far, this year has started off in the same vein, with a 15% jump on Wednesday given back the very next day.

So, what kind of year can we expect for natty? More of the same, or will things calm down? Will we retreat to the $2.50-$3 range that persisted for the first half of last year, or are we into a new era where the range will be roughly double that?

Of course, if those questions were easy to answer, we would all be fabulously wealthy by now and I wouldn’t be wasting time trying to answer them. Just as with crude however, which I talked about last week, what we can do is look at what might be the major influences that will decide where natty goes in 2022 and from there arrive at the most likely scenario.

The biggest of those is the situation on the Ukrainian border. The year started with an attempt at a diplomatic solution to the buildup of Russian troops there, an attempt that failed miserably. As long as the Russians refuse to back down, the risk of disruption…

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