Menu

Search

  |   Commentary

Menu

  |   Commentary

Search

FxWirePro: Natural gas outlook – Shifting from bearish to bullish

In context of decline in oil price, we at FxWirePro expects Natural gas to grow in importance further going ahead. This year, relatively warm winter has kept price under downside pressure. This winter, on downside pressure Natural gas had dropped to $1.68/mmbtu but recovered sharply since then.

We expect natural gas for the medium term (more than six months, even a year) has formed a key bottom. Risk reward favors buying natural gas here and at dips.

We expect, share of natural gas in global energy consumption to rise going ahead and surpass oil by next decade. With that view, there are considerable gaps $5-7/mmbtu in price of natural gas in US and globe. We expect, US export of natural gas to pick up pace substantially pressuring global price to converge.

Trade idea 

Buy natural gas @ current price $2.2/mmbtu and at dips with target around $3.72/mmbtu and stop loss at 1.68/pound.

To become more certain over this call, we like to see price to stay above $2/mmbtu in the near term and price to break above $2.6 before next winter.

  • Market Data
Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.