NATURAL GAS weekly special report based On 1.00 Lot Calculation:
WEATHER FORECASTING MODELS IN THE U.S. POINT TO COLDER DAYS AHEAD:
- According to the National Oceanic and Atmospheric Administration, the US could be expected to see colder temperatures as the probability has risen since the beginning of the year that temperatures will go below normal as we are approaching the end of January and the beginning of February. The tables below show chronologically how weather forecasts have been changing since the beginning of the year.
- Around 44% of the US Households Use Natural Gas for Heating (source: WHYY)
- Around 52% of the US Households Use Electricity for Heating. It is worth noting that 38% of the total electricity gets produced from natural gas power plants (source: US Energy Information Administration).
NATURAL GAS STORAGE REFILLING IN EUROPE FOR 2023/2024 SEASON TO SEE DIFFICULTIES:
- EUROPE WILL NOT RELY ON RUSSIA TO REFILL CAPACITIES FOR THE NEXT SEASON. The season of refilling in Europe is expected to start after March 2023.
- EUROPE WILL HAVE TO INCREASE PURCHASES OF LIQUEFIED NATURAL GAS (LNG) FROM THE USA. Europe is now expected to increase purchases from the US as Russia has almost fully cut off supply to Europe due to the Ukrainian war. Europe has limited infrastructure to take in LNG and therefore further difficulties could occur.
- US LNG EXPORTS WILL RISE CONSIDERABLY IN 2023 AND BEYOND. Increased LNG exports from the US should have positive impact on the US Natural gas price as less natural gas will be available for domestic markets. This misbalance should increase fears over natural gas shortages in the US, which in return, could have positive impact on the US Natural Gas price.
PRICE ACTION:
- NATURAL GAS HIT THE LOWEST PRICE IN 19 MONTHS ($3.418): Natural Gas has undergone a downward correction of around 66% since August 21, 2022 (down from its 2008 high of $9.972). Natural gas traded last around $3.650 per pound and if a full recovery followed, that would imply an upside of around 173%. However, the price could also decline.
Natural Gas, January 12, 2023
Current Price:3.650
|
Natural Gas |
Weekly |
|
Trend direction |
|
|
7.000 |
|
|
6.000 |
|
|
4.500 |
|
|
3.000 |
|
|
2.900 |
|
|
2.800 |
Example of calculation base on weekly trend direction for 1.00 Lot1
|
NATURAL GAS |
||||||
|
Pivot Points |
||||||
|
Profit or loss in $ |
33,500 |
23,500 |
8,500 |
-6,500 |
-7,500 |
-8,500 |
|
Profit or loss in €2 |
31,116 |
21,827 |
7,895 |
-6,037 |
-6,966 |
-7,895 |
|
Profit or loss in £2 |
27,514 |
19,301 |
6,981 |
-5,339 |
-6,160 |
-6,981 |
|
Profit or loss in C$2 |
44,960 |
31,539 |
11,408 |
-8,724 |
-10,066 |
-11,408 |
1. 1.00 lot is equivalent of 10,000 units
2. Calculations for exchange rate used as of 10:00 (GMT) 12/01/2023
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Senior Account ManagerClient Manager regarding their use.
- You may wish to consider closing your position in profit, even if it is lower than suggested one
Trailing stop technique can protect the profit – Ask your Senior Account ManagerClient Manager for more