Analysis N°1
Global fuel demand which itself depends on the economic health of households and industry. Industrial growth and recession exercise a strong influence on the rise or fall of the price of gas.
Global fuel demand which itself depends on the economic health of households and industry. Industrial growth and recession exercise a strong influence on the rise or fall of the price of gas.
The price of oil also strongly influences the price of natural gas. The higher the price of black gold so the higher the price of natural gas. Natural gas is also correlated with coal but to a lesser degree.
The value of the American Dollar as compared to other major currencies also influences the price of natural gas which is generally quoted in this currency. When the value of the dollar falls this often provokes a rise in the gas price.
Natural gas is a combustible fuel that is generally traded in Europe between the companies that produce this gas and those supplied using contracts of a period of between 5 and 25 years. But this commodity is also traded on the international level through different markets such as the NYMEX (New York Mercantile Exchange) and the IPE (International Petroleum Exchange) which makes speculating on its price possible and highly profitable.
The price of natural gas is therefore quoted in real time on these markets as are those of other energy commodities and is subject to influence from speculation and other well known exterior factors such as the following:
To trade in natural gas in real time you should of course use pertinent charts which are available from most popular trading platforms. By configuring the charts according to the type of trading you wish to practise you can view the rates in real time as well as the historical prices and noteworthy movements.
Certain tools integrated in these charts also enable you to easily identify important points such as the support and resistance levels, moving averages or pivot points.
There are two major stock markets where natural gas is traded. The primary stock market is the NYMEX, or New York Mercantile Exchange, in the United States, the second is the NBP, or National Balancing Point of the IPE, or International Petroleum Exchange, which is situated in London. There are other smaller markets too such as the TTF in Holland and the Zeebruge Exchange in Belgium.
However the natural gas that you are able to trade online is that quoted in dollars on the NYMEX exchange.
The price of natural gas is influenced by various factors including of course the price of oil which remains the principal reference in terms of fuel commodities, but also the rate of the American dollar which is the currency used to quote the price of this commodity.
A historical analysis of the price of natural gas informs us above all of the strong volatility of this asset. We can in fact note that over the last five years there have been a number of major successive rising and falling trends.
The most recent rising trend started in April 2012 and ended in February 2014, reaching a historical peak of around $6.151. Since this time a new falling trend has appeared on the fuel market in general. This fall is still continuing at present and may continue over the mid to long term although this asset remains profitable over the short term.
Let us now turn to the benefits of investing in the price of natural gas. Indeed, some analysts specializing in the energy market say so: Natural gas is an energy of the future, which suggests that its price is likely to appreciate in the coming years.
This is due in particular to the fact that this fossil fuel is now the least polluting on the market, which is a real advantage at a time when the world is in the midst of an energy transition with regard to environmental issues. Indeed, natural gas produces up to half as much Co2 as other fuels and is available in large quantities underground, with the added potential of discovering new fields.
On the other hand, we are also moving towards a major development of renewable gas and hydrogen. This applies in particular to biomethane, which is obtained by fermenting organic matter and has the same properties as natural gas. There are also interesting projects concerning power-to-gas, which consists in transforming the electricity produced in excess by renewable solutions such as wind or solar energy into hydrogen or synthetic methane, which can then be stored and used later.
According to the Energy Transition Law, the share of renewable natural gas is expected to reach 10% in 2030 and the gas networks expect a 30% share by the same date.
