Natural Gas: Window of Opportunity to Hedge Cost of Gas & Electricity May Be About to Close – Part 3

Last week, Germany announced it was suspending certification of a Russian gas pipeline called Nord Stream 2. It was hoped this pipeline would help mitigate the impact of low gas supplies in Europe if we experienced a colder than normal winter. I have included a link below to an article written on Nov 18^th “Europe was already facing a winter gas crisis. The risks just got even bigger”, read CNN article

If you read this article, you will understand why the delay in certifying the Nord Stream 2 pipeline increases the risk Natural Gas prices will be much higher this winter both here and abroad. Before this news was announced, I believed based on what I wrote in my Oct 11^th, Energy Update, after reaching the fall low, hedgers would likely push the market to new highs in December, and this news increases this probability.

In my Oct 11^th, Energy Update, I said In my years of trading commodities, I have always focused on seasonal patterns to help determine my entry points, and there were four years similar to this year when Natural Gas rallied into the fall from lower prices; 2000, 2002, 2005 and 2013. And in each case, Natural Gas pulled back in the fall prior to rallying to a new high in December.

Subsequent to my Oct 11^th Energy Update, I explained this year’s rally was due to the present administration’s restrictive energy policies and fear of inflation in the U.S., along with a 10-year low in Europe’s Natural Gas supplies caused by their green energy policies. And if this year’s winter is colder than normal, the news released last week not only increased the probability Natural Gas will rally to a new high in December, but it will also likely be much higher in the 1^st quarter of 2022.