Natural gas prices have been surging recently and that has resulted in some major concerns about a so-called ‘energy crunch’. Furthermore, natural gas inventory levels have been really low, particularly in Germany, and that has been boosting prices. So, the question now is, ‘ will the weak seasonals come into play or will the low inventory levels keep prices supported? Natural gas is a tricky market to trade right now, but with recent blow-off price action from early October, it might be due a deeper pullback.

Over the last 10 years, WTI crude has fallen 08 times between October 31 and December 30. The average loss has been -10.57%. The largest gain was +20.57% in 2013 and the largest loss was -28.69% in 2020.

Major Trade Risks: The main risk to this trade is natural gas resuming its uptrend on a cold winter in Europe and falling inventory levels.


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High Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to HYCM’s Risk Disclosure.

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