Natural Gas Update: Will Seasonality Rule This Year?

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It’s time for another natural gas update. Seasonal tendencies tell us this commodity should start rallying soon- but will it?

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Presentation Transcript

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Commodity Trading Research Natural Gas Update: Will Seasonality Rule This Year?

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Welcome to Commodity Trading Research Your premier site for fundamental and tech nical analysis for profitable Commodity Trading . For more info on Commodity Trading Research visit our website www.CommodityTradingResearch.com

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Get Your Free Report on the BEST Commodity Stocks! We’ll tell you about this Special Offer at the end of the video!

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Hi, My name is Justin and I‘m with Commodity Trading Research , today were reviewing our recently published article…

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Natural Gas Update: Will Seasonality Rule This Year?

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Despite historic volatility in equities the past few weeks, the natural gas market has been decidedly ho-hum. In fact, I’d venture to say trading in the commodity is akin to watching paint dry. Take a look for yourself…

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As you can see, natural gas has been stuck in a choppy trading range around $2.70 mmBtu since mid-August. Even though temperatures have been rather warm in key natural gas usage regions

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the past few weeks, investors seem content with letting prices dwindle.

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But that may change soon…

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You see, we’re entering the most bullish time of the year for natural gas. According to a 20-year seasonality study, natural gas tends to bottom in early September and rally through late December.

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This seasonal rallycomes to fruitionbecause investors start pricing in the high demand winter heating season, which is right around the corner.

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Will a seasonal rally take hold this year?

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While it’s tempting to embrace the strong odds behind seasonal trends we have to be mindful of the current supply/demand balance. According the US Energy Information Administration (EIA) the market is still very well supplied.

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In fact, for the week of August 28th there were 3,193 billion cubic feet ( bcf ) of supply in US storage caverns. That’s 4% higher than the 5-year average and 18.3% higher than last year.

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Clearly, US natural gas explorers are still producing the commodity at a remarkable pace.

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Here’s the deal…

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In order for a sustainable natural gas rally to take hold, we need to see two things occur. First of all,overall US natural gas production must slow meaningfully. And secondly, new demand must come online that’s capable of reducing inventories substantially.

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While we haven’t seen either of these factors happen just yet, we’re likely on the cusp of it.

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How so?

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I won’t get into all the nitty gritty details today. However, I am putting the finishing toucheson a new report that outlinesthe potentially profitable situation in natural gas.

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With the commodity trading near multi-year lows under $3 it will only take a few slight fundamental adjustments to send it sharply higher.

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Under the right circumstances, we may see natural gas rally50% or more from current prices. Be on the lookout for this FREE report as it will hit this website soon!

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