Medium term
Trade view / 14 October 2016 at 13:09 GMT

Storage data lights up natural gas

Managing Partner / Spotlight Group
United Kingdom
Instrument: NGX6
Price target:
Market price:

Natural gas futures have held ground this morning following a sharp gain of over 4% yesterday on data that showed that natural gas supplies in storage in the US rose less than expected last week.

The US Energy Information Administration (EIA) said in its weekly report that natural gas storage in the rose by 79 billion cubic feet in the week ended October 7. This was under the expected level 87 billion cubic feet.

That compared with a gain of 80 billion cubic feet in the preceding week, 97 billion a year earlier and a five-year average build of 92 billion cubic feet.

Natural gas futures have made a good recovery in recent months since hitting a 20-year low of USD1.611/Mm BTU in early March. An unusually warm summer helped trim a supply surplus that was weighing on prices.
Nat Gas
Source:, Spotlight ideas

Nat Gas Time Techs Source:, Spotlight ideas

The technical aspect of the market is biased toward buying although there is one short-term area where selling pressure may just force a little profit taking back to the 3.25 territory.

I would look to buy natural gas, for even if prices do wobble a little lower at the opening, I am minded of the onset of the northern hemisphere autumn / winter season and a need for home and office heating.

Natural Gas Five-Year Chart: 
Nat Gas

Management and risk:

Parameters: Natural Gas November 16 (NGX6)  Be ready to roll to NGZ6
Entry: Buy 3.352 v12:24 GMT (USD/Mm BTU)
Targets: 3.40 ... 3.82 ... 4.25 ...4.51
Stop: 2.87
Time horizon: medium-term

— Edited by Clemens Bomsdorf

Non-independent investment research disclaimer applies. Read more
vanita vanita
Dear Steve,
Great call Steve .
You are awesum👍👍👍👍
ChristianK ChristianK
Dear Stephen. Does it still make sense to get into this trade? The market has been a bit up and down. I wonder if I should wait till the December contract is out next week? Thx
Stephen Pope Stephen Pope
Dear ChristianK,

The technical aspect this morning is not encouraging. All measures are reading as a Sell or Strong Sell until one gets to the Daily or longer...then they are Strong Buy.

Given the closeness of the volume in the contracts.. Nov 4150 and Dec 3280... I would suggest waiting until the end of the sesssion and if a dip has been booked on the day, consider acquiring the Dec...I will roll very soon and see limited reason to be in the Nov...especially as a new entrant.
ChristianK ChristianK
Got it. Thanks very much
SvsG SvsG
Hi Stephen, what is your view on the stop-loss level for the December contract
Stephen Pope Stephen Pope
Dear SvsG,

As at close,

Month Last Chg. Open High Low Volume Time
Cash 3.140s -0.080 0.000 3.140 3.140 0 10/19/16
Nov 16 3.121 -0.049 3.173 3.201 3.101 154434 15:59
Dec 16 3.425 -0.009 3.444 3.466 3.388 95094 15:59

In the short-term I would see Dec stop loss at 3.16 and on a slightly longer time perspective down to 2.47.

AndrejLences AndrejLences
Hello Steve. I would appreciate new Natural Gas article very much. Thank you.


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