Natural Gas

Natural Gas Trading

Introduction to Natural Gas

Natural gas is also known as carbon gas. It is an occurring source of energy produced deep under the surface of the earth. It comprises several components with Methane as its largest constituent. Natural gas is the cleanest burning fossil fuel available today and is praised as a clean alternative energy source. When burned, it produces carbon dioxide, water vapor, and small amounts of nitrogen oxides.
 
However, there is less emission of carbon monoxide, carbon dioxide, and nitrous oxides compared to other fossil fuels. It produces no ash or particulate matter and generates fewer greenhouse gases than other fossil fuels.
 
All these properties also to its availability make it crucial in the energy transition plans of many countries across the world

Technical Analysis for Natural Gas

Traders get informed decisions in their trading activities. Familiarity with trading hours for natural gas can help improve your trading strategy. It is important for a trader to know natural gas fundamentals, such as weather, supply, and demand. This affects natural gas prices as well as the price of crude oil.

Analysts who apply technical analysis believe that history repeats itself. The price behavior is determined by examining relevant supply and demand factors. Factors such as production, storage, and inventories.

Yet, basic analysis tends to be associated with more emotion, which can affect the interpretation of the data. Fundamental analysis uses logic to model different price behavior of certain commodities. It is crucial for assessing supply and demand and is often used in conjunction with technical analysis.Read More

Fundamental Analysis For Natural Gas

While technical analysis analyzes historical price activity using a chart-based mathematical approach. The fundamental analysis shows some factors that influence the price of a security. Fundamental analysis is a broad term that describes the trading activity on the basis of global aspects.

Natural gas prices are influenced by factors such as weather, storage, supply and demand, and the price of natural gas. Trading in natural gas can be lucrative because it has many advantages, such as low volatility, low risk, and high liquidity. Natural gas prices move in a recurring cyclical pattern. The pattern occurs when there is an increase or decrease in the price of natural gas and a fall in prices.

Higher price during the early month of the year. The remaining months generally reflecting the long-term trend of price increases in the natural gas market. Long-term investors are keen to keep an eye on the price of natural gas and other commodities.Read More

Determinants of Natural Gas Consumption and Price

The primary drivers of incremental changes in the consumption of natural gas vary across countries. The price of natural gas tends to be correlated with the commodity’s own supply and demand inventories. Read More
  • Extreme or abnormal Weather conditions. These can push and pull the forces of supply and demand.
  • The availability of natural gas in Storage. This influences the price based on its surplus/deficit. When there is a stock excess, costs are likely to be reduced thanks to a sufficient supply and vice versa.
  • Alternative goods especially more sustainable energy sources such as solar and wind power. This impacts the prices of natural gas. With the growing emphasis on “going green”, these energy sources can become more important in the future.
  • Economic growth in industrial sectors will push natural gas prices up. The demand for consumables and services rendered will also rise.

Natural Gas Consumption

According to the International Energy Agency. The demand for natural gas is set to increase by about 1.6% per year over the next five years. The bulk of this development coming from developing markets in Asia.

Trading Natural Gas

Investing in natural gas is no longer a complicated process. Traders can now speculate on the price of natural gas online using Contracts for Difference to go both long and short. CFDs are contracts between a trader and a broker. They are tradable instruments that mirror the movement of the underlying asset. It let you take positions without owning any physical commodity. It is worthy to note that traders are able to go short with CFDs, if they think there will be a drop in price, and still enjoy leverage offered by the broker.

FAQ's

 
 
Prices of natural gas are a feature of supply and demand in the industry. Few short-term alternatives to natural gas as a source for heating and producing power. During high demand hours, fluctuations in supply, or demand over a brief period of time will lead to significant price increases. The production of natural gas, net imports, and rates of underground storage are supply-side factors.

Benchmarks for natural gas are identical to crude oil. Henry Hub is for gas as WTI is a benchmark for North American oil. Likewise, in Europe  Brent is the benchmark for oil prices, so is NBP for gas 

Henry Hub is the most used standard.

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