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Energy Buying Strategies in the Current Market

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Per this week’s Energy Market Update, I have provided some energy buying strategies in the current market.

Volatility and weather have been the key market drivers over the last month but that should not be a surprise since November is a winter month and weather is the key driver of short-term natural gas prices. We saw a mild start to November that drove forwards down and most natural gas contracts hit their all-time lows — even beating prices that were available during early 2012. However, this dip was as short-lived as the mild weather. November quickly turned cold and natural gas futures rallied. Prompt Month futures rose by almost 50 cents to 6-month highs before stalling near $4.00, their key resistance level. And, prices broke through that threshold on December 5, thanks to a bullish storage report. Longer-term prices also rose but more slowly, as the rally was driven by short-term weather and the spread between the near- and long-term narrowed significantly.

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