Li Wanxi:8month9Why natural gas prices are stagnant? The reason is that supply exceeds demand

Li Wanxi:8month9Why natural gas prices are stagnant? The reason is that supply exceeds demand

Throughout the years, with the rise of temperature, the demand for natural gas has increased, and natural gas prices will also rise accordingly. However, the situation is different this summer. Despite reaching a historic peak in temperature and some returns from bullish investors, natural gas prices remain stagnant. Looking back at investor holdings, the sentiment of bulls has reached an unprecedented high. Even so, on exchange investors still have a clear understanding that even with an increase in demand, natural gas is still in a state of oversupply, and it is understandable that prices cannot be further effectively broken through. Throughout the international trend, only with a calm mind like water can one maintain a long-lasting vitality. Whether you are lost in the market, can you add orders, lock orders, or have poor profitsV.letterjs6486Talk to the author Li Wanxi.

However, some market participants have indicated that by this year11In the month, natural gas inventories will break through5Annual average level. However, although investors are confident in the recovery of winter natural gas prices, in the short term, if they want to recover more than3The US dollar still faces significant resistance.

In addition, independent natural gas producers - from Natural Gas CanadaPeyto ExplorationreachChesapeake EnergyEnergy companies choose to postpone production processes during winter. even ifPeytoNatural gas companies have lower production costs but higher financial internal rate of return in winter(IRR)Still a big problem. Therefore, more market participants are more inclined to wait until9The decision on whether to further increase the risk exposure to natural gas will only be made on a monthly basis.

Therefore, based on the above, for long-term natural gas investors, being long on natural gas is undoubtedly a wise choice, as the future situation of supply shortage has been established. However, for short-term investors who cannot withstand volatility, they still need to wait9Only by providing clearer production data can natural gas producers determine the direction of the market.

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