Futures spread

On October 25, 2017, natural gas December 2018 futures closed $0.11 above the December 2017 futures. The difference between the two futures is referred to as the futures spread.

That day, the futures spread was thus at a premium of $0.11. On October 18, the futures spread was at a premium of ~$0.12. In the seven calendar days leading up to October 25, natural gas futures rose 0.6%.

Understanding the Natural Gas Futures Spread—And What It Means for Prices

Premium

A rise in the premium may cause natural gas gains to evaporate or, at least, hint at a rising bearish sentiment. For example, on March 3, 2016, the premium was at $0.84, which meant that natural gas active futures were at a 17-year-low closing level. Any fall in this premium could add bullishness to natural gas futures.

Discount

On the other hand, any rise in the discount could cause natural gas to advance. For example, on May 12, 2017, the discount was at $0.5, which meant that natural gas active futures were at a high closing level for the year. Conversely, any fall in the discount could evaporate natural gas gains.

In the trailing week, the premium contracted. Natural gas futures rose during that same period.

Energy stocks

US natural gas producers’ (XOP) (DRIP) (IEO) hedging decisions could be impacted by the natural gas futures’ forward curve. Similarly, the curve is also important for midstream natural gas transportation, storage, and processing companies (AMLP).

On October 25, 2017, natural gas December 2017 futures were trading $0.12 below the January 2018 futures. For this reason, ETFs such as the ProShares Ultra Bloomberg Natural Gas (BOIL) and the United States Natural Gas Fund LP (UNG) could underperform natural gas futures, because such funds lose money during the rollover of their holdings to active futures.

On October 25, 2017, natural gas futures contracts for delivery until February 2018 settled at progressively higher prices.

Latest articles

Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.

The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.

Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.

Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.

Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.

172.31.71.127