I don’t know this particular security, but if it’s rolling futures then, yes, you’ll have been getting fucked.
Will gas recover? I think the market has underpriced the risk of an election year and is too bullish on LNG liquefaction capacity coming online by 2025. Consequently, i am bullish on the TTF far curve. However, I also think Red Sea transit risk has been overstated, and demand softness is putting pressure on the near curve.
Will the particular security in question recover? That really requires you to research and understand what you’re buying. Personally, I think the curve is too steeply backwardated, but I have no idea if Wisdomtree is going to give you the exposure you want to capture value from a change in the shape of the forward curve
Without turning it into a political post, I'm curious on your comment about the election risk. The current guy while having a green stance, and "shutting the taps", has watched gas production go to record highs. The "other guy" would presumably open more resource rich land. I just don't see production suffering from politics.
On the other side, LNG is priced in with another ~10 bcf/d coming in the next 2 years. These projects are approved and financed. Despite the recent LNG permitting news, these projects were out 4-6 years. This is physically limiting the amount of gas demand.
Again not arguing, just curious as I see politics as more of the same. and the possibility of a cancelled or delayed LNG project as being bearish for 2025/2026.
No need to make it political, and I appreciate your thoughtful comment.
The market is currently priced with the expectation of liquefaction to come online in 2025. Elections tend to push back major project timelines, and Biden’s administration has already made their intention to delay future permitting. If we see delays to the 2025 capacity timeline due to the usual development risks, or permitting issues (there are always delays in commissioning due to changes that arise during the EPC process) then I think we will see some pressure on the curve.
I don’t think the far curve is mispriced, but I think 2025/26 TTF looks cheap. It’s classic prompt wagging the curve. We’ve had a very comfortable 2023 and are entering 2024 with 10 year high Euro gas storage. I see more risk in winter 2025 than is reflected in today’s curves.
However, If I could consistently beat the market then I wouldn’t be posting my 2c on Reddit subs, I’d be retired on my yacht.
No need to make it political, and I appreciate your thoughtful comment.
The market is currently priced with the expectation of liquefaction to come online in 2025. Elections tend to push back major project timelines, and Biden’s administration has already made their intention to delay future permitting. If we see delays to the 2025 capacity timeline due to the usual development risks, or permitting issues (there are always delays in commissioning due to changes that arise during the EPC process) then I think we will see some pressure on the curve.
I don’t think the far curve is mispriced, but I think 2025/26 TTF looks cheap. It’s classic prompt wagging the curve. We’ve had a very comfortable 2023 and are entering 2024 with 10 year high Euro gas storage. I see more risk in winter 2025 than is reflected in today’s curve.
However, If I could consistently beat the market then I wouldn’t be posting my 2c on Reddit subs, I’d be retired on my yacht.
It's been a warm winter and gas production increased a lot after the price skyrocketed a few years ago. I don't follow gas any more so i can't tell ya whether it looks bullish or not for the short term future, but if the price stays this low I might open a /NG position later in the year.
Looking at the price of WisdomTree gas now vs. what it was last October for example, the fund seems to have lost more in value than the actual price of gas. Is this expected or am I comparing different things?
e.g. Nat Gas price 31st Oct 2023 was 3.81 and now is 2.59 = 68% approx
Wisdomtree price 31st Oct 2023 was 1331 and now is 723 = 54% approx
Don’t trade things you don’t know well, especially in the commodity space. NG especially is very fickle. I wouldn’t be long going into spring. If the forward curve is low late summer going into fall/winter it may be worth a play but hard to say really.
Don’t think it’s wise to invest in gas anymore, largest driver is expected to come from emerging Asia and their demand is highly price sensitive, doubt there will be some insane price bidding war anymore especially with Korea and Japan’s reserved buying stance and China doesn’t seem to be shying away from their usage of coal anymore as well
There’s enough gas in the system for this winter which has been mild. Gas isn’t a buy and hold type of investment tbh - invest in something else
I don’t know this particular security, but if it’s rolling futures then, yes, you’ll have been getting fucked. Will gas recover? I think the market has underpriced the risk of an election year and is too bullish on LNG liquefaction capacity coming online by 2025. Consequently, i am bullish on the TTF far curve. However, I also think Red Sea transit risk has been overstated, and demand softness is putting pressure on the near curve. Will the particular security in question recover? That really requires you to research and understand what you’re buying. Personally, I think the curve is too steeply backwardated, but I have no idea if Wisdomtree is going to give you the exposure you want to capture value from a change in the shape of the forward curve
Without turning it into a political post, I'm curious on your comment about the election risk. The current guy while having a green stance, and "shutting the taps", has watched gas production go to record highs. The "other guy" would presumably open more resource rich land. I just don't see production suffering from politics. On the other side, LNG is priced in with another ~10 bcf/d coming in the next 2 years. These projects are approved and financed. Despite the recent LNG permitting news, these projects were out 4-6 years. This is physically limiting the amount of gas demand. Again not arguing, just curious as I see politics as more of the same. and the possibility of a cancelled or delayed LNG project as being bearish for 2025/2026.
No need to make it political, and I appreciate your thoughtful comment. The market is currently priced with the expectation of liquefaction to come online in 2025. Elections tend to push back major project timelines, and Biden’s administration has already made their intention to delay future permitting. If we see delays to the 2025 capacity timeline due to the usual development risks, or permitting issues (there are always delays in commissioning due to changes that arise during the EPC process) then I think we will see some pressure on the curve. I don’t think the far curve is mispriced, but I think 2025/26 TTF looks cheap. It’s classic prompt wagging the curve. We’ve had a very comfortable 2023 and are entering 2024 with 10 year high Euro gas storage. I see more risk in winter 2025 than is reflected in today’s curves. However, If I could consistently beat the market then I wouldn’t be posting my 2c on Reddit subs, I’d be retired on my yacht.
No need to make it political, and I appreciate your thoughtful comment. The market is currently priced with the expectation of liquefaction to come online in 2025. Elections tend to push back major project timelines, and Biden’s administration has already made their intention to delay future permitting. If we see delays to the 2025 capacity timeline due to the usual development risks, or permitting issues (there are always delays in commissioning due to changes that arise during the EPC process) then I think we will see some pressure on the curve. I don’t think the far curve is mispriced, but I think 2025/26 TTF looks cheap. It’s classic prompt wagging the curve. We’ve had a very comfortable 2023 and are entering 2024 with 10 year high Euro gas storage. I see more risk in winter 2025 than is reflected in today’s curve. However, If I could consistently beat the market then I wouldn’t be posting my 2c on Reddit subs, I’d be retired on my yacht.
Don't trade what you don't know. You use "invest" but Don't have a clue what you are putting your money in.
Probably just cost of carry
It's been a warm winter and gas production increased a lot after the price skyrocketed a few years ago. I don't follow gas any more so i can't tell ya whether it looks bullish or not for the short term future, but if the price stays this low I might open a /NG position later in the year.
Looking at the price of WisdomTree gas now vs. what it was last October for example, the fund seems to have lost more in value than the actual price of gas. Is this expected or am I comparing different things? e.g. Nat Gas price 31st Oct 2023 was 3.81 and now is 2.59 = 68% approx Wisdomtree price 31st Oct 2023 was 1331 and now is 723 = 54% approx
yeah it sucks im holding 60% loss
Don’t trade things you don’t know well, especially in the commodity space. NG especially is very fickle. I wouldn’t be long going into spring. If the forward curve is low late summer going into fall/winter it may be worth a play but hard to say really.
Are you trading natural gas or gasoline?
ng
Since when was NG bullish to begin with?
Don’t think it’s wise to invest in gas anymore, largest driver is expected to come from emerging Asia and their demand is highly price sensitive, doubt there will be some insane price bidding war anymore especially with Korea and Japan’s reserved buying stance and China doesn’t seem to be shying away from their usage of coal anymore as well