Recording Stock performance on paper
Markets

There is something about natural gas in January

Natural gas prices have been crushed today

Trading natural gas isn't for the meek. The regular intraday moves are often over 3% but today is a whole different level.

Front month natural gas futures are down 10.3% today and that's the biggest one-day drop in at least a year as selling has accelerated in the past hour.

if you look at the chart, it's not that bad because natty rose 56% from the lows in mid-November. The December low of $3.24 is key for the short term.

Analysts say today's drop came after forecasts for warmer January weather.

What's interesting is that there is a long-term seasonal trend of natural gas strength in January. It's as if every year the market anticipates a brutally-cold January but once the calendar turns, the forecasts don't seem all that bad.

The average decline since 2000 has been 3.63% and it's been -2.3% in the past decade.

The thing about the weather is that it's always changing. What doesn't change is that holding onto long-term natural gas positions is insanity.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

ForEx

Latest Markets Videos