Here's why gas prices are sinking so much

Owen_Tradinghouse
2022-10-21

Have you found a strange phenomenon? Although the word energy crisis has been very popular in recent days, saying that Europe and the United States are facing an unprecedented winter energy crisis, but as a result, energy price has falled so much , especially natural gas.

Especially recently, American natural gas futures have fallen completely below the 50-week moving average.

If the futures price of natural gas can stabilize on the 50-week moving average as it has done for many years before, we can also think that natural gas has completed the retracement of technical banks due to the completion of inventory in Europe and the reduction of demand for natural gas in Europe in winter. However, the fact is that natural gas actually completely fell below the 50-week moving average last night, and a big low opening gap was formed!


In the future, the analysis of the trend of natural gas may become even more vague,

Because according to American inventory data, Although the inventory remains at the lowest level in the past five years, it is still accumulating and rising. More importantly, from the average quarterly rise and fall in the past five years, the bullish probability is the highest in August, and the lowest in December. Therefore, natural gas futures generally complete price in the winter inventory decline before August,


If The 50-week average is solid for natural gas futures price, it may have a stronger bargain-hunting mood. However, fundamentally speaking, European inventories make up more than 90%, It seems that there is not so much energy to keep the gas price falling.

But when it comes to why gas has fallen below the 50-week average, I want to say a little more. I think the market is pricing in the expectation that the Ukrainian-Russian war will end in the near future.

Look at this:


It is very likely that we have mastered some important news in advance, and under the consideration of preserving the safety of our own nationals in Uzbekistan, we have joined in this large-scale evacuation operation involving many countries.

This intelligence is easy to guess:In the short term, UzbekistanThere is a high probability that the Russian war will escalate greatly again, and Ukraine may not even be suitable for human survival in winter.

According to the past practice, the coldest temperature in winter in the high latitudes of eastern Ukraine can reach about -40 degrees Celsius, and the coldest temperature in western Ukraine can reach about -30 degrees. Even in winter, the average temperature in Uzbekistan is about MINUS 10 degrees. This may be a good opportunity that Russia has been waiting for.

What we have to do is to wait for more news of the escalation of the war, and keep an eye on the reactions of Europe, America and Zelenski at this winter war , so as to judge whether the war is interrupted or completely ended. Once the news has a clear direction, the financial market will turn upside down and there will be a big turmoil. We will give detailed analysis and strategy recommendations at that time.

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Comments

  • criticalbomb
    2022-10-22
    criticalbomb
    thanks you very much ❤️❤️❤️
  • Samlunch
    2022-10-22
    Samlunch
    I Have a lot of gas would someone like to harvest it
  • Maria_yy
    2022-10-24
    Maria_yy
    The 50 week is an important reference line for gas prices.
  • PandoraHaggai
    2022-10-24
    PandoraHaggai
    I don't understand why energy prices have dropped so much.
  • EvanHolt
    2022-10-24
    EvanHolt
    Natural gas prices are likely to skyrocket in the winter.
  • DJ90
    2022-10-23
    DJ90
    Good post. Had been wondering why this was happening.
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