Will Natural Gas See Negative Rates? | NATURAL GAS ($NATURALGAS)
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Natural gas demand hasn't fallen as much as oil, but a 2% decrease in demand (compared to oil's 6%), and already dwindling storage issues due to production not being curved enough and a warmer than normal winter, could have natural gas suffering the same fate as oil. That fate being temporary negative prices, due to a lack of storage, due to decreased demand, at least partially from COVID. With all of that in mind, even if this doesn't come to pass, the fear of it could drive prices lower. We don't want to short the bottom, but as we learned from oil, there is a scenario in which there is no bottom when it comes to expiring futures and a lack of storage. Still, the idea for today isn't a trade, it is mapping out some long term levels to keep in mind for whichever way price does move.
Resource: oilprice.com/Energy/...rage-Fills-Fast.html + www.naturalgasintel....on-productions-slide
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Fractal Trend is showing a downtrend (Maroon bar color) on the 3 day timeframe. This represents the longterm downtrend in natural gas.
Typically in a downtrend we are looking for short positions. With that said, natural gas's historic volatility could certainly produce some nice long setups on smaller timeframes if one of the support levels noted on the chart holds.
To the downside S1 - S4 represent supports of last resort for nat gas bulls. IF these levels are breached, we could be looking at negative rates for natural gas. Meanwhile, if demand picks up and storage becomes less of an issue, or if prices move up for any reason, then R1 - R3 present logical spots to look for reactions. Any volatile move from natural gas would be nice to capture, so we'll be keeping a close eye on all these levels, and specifically will have our interest piqued if S4 can't hold and we run into more supply/demand issues for natural gas itself.
Like, Comment & Follow to help the community grow 🎉🎉
---
Natural gas demand hasn't fallen as much as oil, but a 2% decrease in demand (compared to oil's 6%), and already dwindling storage issues due to production not being curved enough and a warmer than normal winter, could have natural gas suffering the same fate as oil. That fate being temporary negative prices, due to a lack of storage, due to decreased demand, at least partially from COVID. With all of that in mind, even if this doesn't come to pass, the fear of it could drive prices lower. We don't want to short the bottom, but as we learned from oil, there is a scenario in which there is no bottom when it comes to expiring futures and a lack of storage. Still, the idea for today isn't a trade, it is mapping out some long term levels to keep in mind for whichever way price does move.
Resource: oilprice.com/Energy/...rage-Fills-Fast.html + www.naturalgasintel....on-productions-slide
---
Fractal Trend is showing a downtrend (Maroon bar color) on the 3 day timeframe. This represents the longterm downtrend in natural gas.
Typically in a downtrend we are looking for short positions. With that said, natural gas's historic volatility could certainly produce some nice long setups on smaller timeframes if one of the support levels noted on the chart holds.
To the downside S1 - S4 represent supports of last resort for nat gas bulls. IF these levels are breached, we could be looking at negative rates for natural gas. Meanwhile, if demand picks up and storage becomes less of an issue, or if prices move up for any reason, then R1 - R3 present logical spots to look for reactions. Any volatile move from natural gas would be nice to capture, so we'll be keeping a close eye on all these levels, and specifically will have our interest piqued if S4 can't hold and we run into more supply/demand issues for natural gas itself.