Oil Plunges and Natural Gas Soars, What to Make of These Extreme Moves

Oil Plunges and Natural Gas Soars, What to Make of These Extreme Moves

Posted On November 14, 2018 3:33 pm

A month-long slide in oil and sudden surge in natural gas price is impacting global stocks, the bond market, hedge funds, and consumers. Here is what is causing the moves and what might happen next…

In natural gas, which is widely used to heat homes in northern U.S. and Canada, a change in weather forecasts over past few days has pushed futures to $4.40 per BTU, which is a 35% surge in just one week, and settled at its highest level since February 2014.  




Meanwhile, oil has taken a steep tumble, going from a year high of about $76.50 to a new 52 week low of $55.50, which is a 28% decline in less than a month.  This month included a record 12 consecutive down days for oil; the most rapid in the 45 years of tracking the data. 



The Big Unwind

The opposing price moves in natural gas and oil has accelerated over the past few days, as many people believe…

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About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.