will natural gas prices and UGAZ crash?


hello taking trades family welcome back
to the channel in today’s episode we are
getting back into natural gas we’re
gonna talk about you guys we’re going to
talk about /ng which is the futures
market but we got some other stuff we
got to chew up and digest I need your
help understanding a couple of articles
that I read today I’m trying to break
them down I’m trying to apply them to
how we’re trading you guys and digas and
how we look at /ng but some of the
numbers are really wild and I’m starting
to wonder what exactly is going to
happen with natural gas prices and are
we ever going to AB and flow back to the
upside or are we kind of in a little bit
of a race to the bottom in terms of
price for natural gas so if you’re
interested in trading you guys d gas or
the natural gas futures this videos for
you so stay tuned
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so in other markets if you have super
lackluster prices on a commodity
production tends to slow down and then
you start to see supply also diminish a
little bit but in the case of natural
gas we’re not getting that at all
production is way up demand is up but
not as high as production analysts are
saying that natural gas currently is not
trading on demand fundamentals and this
was new to me the reason for this is
because supply is greatly outpacing
demand so that had me asking myself you
know why is that wise is supply so high
right now demand is growing but here’s
supply and then here’s demand right
along behind it so it’s not being
dictated by a normal supply and demand
scenario which can be confusing
especially for people like you and I who
are interested in you guys digas and the
natural gas futures market now people
everywhere are looking for a cleaner
alternative to coal people are looking
to reduce their carbon footprint so
everybody is rushing to natural gas
because it has such a low price point
and everybody’s calling it the – – gas
and the interesting thing about this is
everyone’s rushing to gas and as we
develop technology and we advance in our
ability to be able to forecast and
determine how much in reserve we have in
terms of untapped natural gas that
people are drilling for we’re starting
to find that there are large reserves
that are much larger than we ever
thought they were originally so the USGS
data coming out of the Appalachian
region is indicating that estimates now
with newer technology are indicating
that there’s about 75% more natural gas
being housed underground then estimated
in a study in 2011 so that’s really wild
that is a massive massive under delivery
on that in 2011 so to discover that you
have so much natural gas it makes people
want to rush to it and use it so
companies are producing a ton of it and
our supply is at all-time highs
estimates for the Marcellus Shale have
risen
from two trillion cubic feet to 84
trillion to 97 trillion in under 20
years so it just keeps growing and
growing and growing there’s such a
massive supply of natural gas available
to us and people are exploring and
searching and coming up with better ways
of harnessing it and even though gas
production is an all-time high
we expect it to keep growing we expect
production to continue to rise which can
have an effect on price which directly
will affect our you gas and D gas trades
one of the biggest drivers of demand
currently is coal-fired power plants
that are shutting down looking for
cleaner alternatives are transitioning
to burning natural gas so a coal-fired
power plant that has recently shut down
could start back up with new
infrastructure for burning natural gas
to create electricity so this is a
positive thing that we’re getting a
cleaner burning fuel and that we already
have infrastructure mostly in place in
that we have coal fire power plants that
are already built that can be
retrofitted for natural gas burning and
the current estimates as of today’s
reading it’s saying that 45% of all
electricity production in the US is
expected and is due to natural gas all
the way through the year 2050 now liquid
natural gas where they take natural gas
they cool it to a liquid they load it
and they ship it primarily to Asia this
is also showing big demand in that area
but overall when you look at the whole
lump sum of natural gas and production
the liquid natural gas exports only
count for about five percent of total
u.s. gas usage which is pretty
staggering then the very interesting
thing that made this all the more
confusing for me was u.s. power
generation use of natural gas is
supposed to continue climbing all the
way through 2019 and into 2020 but then
it by the end of 2020 they’re estimating
that demand is going to actually decline
from 30.6 billion cubic feet
– twenty nine point six billion cubic
feet so we’re actually coming to a peak
and then we’re gonna start to show a
downslide that’s the estimate currently
so that happy very confused and after
doing some more digging it sounds like
because of renewable energy wind solar
non-carbon-based production of energy
that’s gonna drive the decreased demand
of natural gas in the year 2020 based on
these estimates that I read now I’m
gonna link both of these articles below
in the description so that you guys can
read them because I feel like we need to
talk about what’s going on moving
forward because I’m starting to feel
like the gas prices in /ng in the
futures markets they could just sort of
sag and not do a whole lot because a lot
of bulls who were long biased seemed to
kind of be dissipating they’re not as
excited about natural gas because the
price just keeps coming down because
production is so high and that’s the key
thing I want to figure out is what is
causing production to be so high other
than we have an infinite amount not an
infinite amount but a massive amount or
underestimated amount of natural gas
here in the United States now we are
going to look at the charts today I want
to look at what natural gas is done in
the futures markets over the past few
years and my concern is that I don’t
want I don’t know if natural gas is just
going to abandon just continue on the
downslide if you look at you guys
it’s peak height versus word is now it’s
a pretty staggering difference and we’ll
look at that as well and talk about why
that might be but I don’t know if
natural gas is on a race to the bottom
because with so much supply and so much
production it just seems like the price
can only go down we have to have some
sort of massive demand to come in to use
that supply in order to shift prices in
the other direction now correct me if
I’m wrong if you guys know more about
this than I do it you’ve read something
that’s indicating something different
than what I’m talking about today I
love to hear it please comment below and
let me know if you’ve heard anything
different than what I’m reporting but
this has just got me very confused and I
was watching /ng today and watching it
kind of sag and I know we’ve all been
waiting for that pop we’re wanting to
see that cold weather come in and push
it back to the outside but now I’m
starting to wonder will weather really
have that big of an effect like we might
get little pops here and there and we
did just recently have that nice push to
the upside but I’ve had people send me
emails and say you know I don’t think
that was a realistic pop I think that
was sort of drama driven it wasn’t
related to actual supply and demand
issues and so it just really got me
thinking about what is the future of
natural gas could you gas crash I don’t
know but let’s jump into the charts
let’s take a peak and then like I said
leave your questions below and let’s
keep talking about this here we have /ng
we’ve got this up on the daily chart and
let’s just look at I guess the elephant
in the room is look where it used to be
I mean if I draw a bubble on this look
at where natural gas used to be so when
I look at this I start seeing the the
lower highs the lower lows and it just
makes me wonder you know where are we
going with natural gas what what is the
future and the concerning thing is we’ve
built this bottom base of support down
here so we’ve continuously had these
lower lows and lower highs as we’ve
moved down and then we just got this
crazy eruption that looked like maybe we
were backtracking back to the upside we
got another bounce and now we’re back
down to that level so after reading some
of these reports I’m just feeling
confused about where we’re gonna go from
here and now I’m I don’t know if winter
weather is what we need to push it up
correct me if I’m wrong but I don’t know
if that demand from a shift to winter is
gonna create such demand that it’s gonna
overcome the production right now
production is at all-time high so I
very curious to see what happens but I’m
super cautious right now on this I don’t
know what’s gonna happen I feel like I’m
turned around and sort of upside down
and I need you guys to kind of comment
let me know what you think let’s sort of
talk through this do you think it could
break through the support level and
continue lower and if so we’ve got quite
a level down here that’s been set up for
a while if it breaks below that level
you know is it unrealistic to think that
we could go below 2.1 2.0 8 I don’t know
I’m kind of really I’m kind of
rethinking things and just trying to
figure out where we’re going from here
now looking at the weather this is also
something that’s interesting is we’re
getting that cooldown this week right we
all talked about it I’ve been saying oh
I’m so excited because once that pushes
that heat out bang people turn on their
heaters and we go back to the outside
but then the week after that is
forecasted at being a little bit warmer
so if we’re getting a warmer winter then
that’s gonna flatten out prices and
we’re not going to get that spike back
to the upside and if production stays at
such all-time highs and we keep cranking
natural gas really has no other option
but to go down so comment below let me
know what you think if we dive into the
chart real quick the intraday chart you
can see here on the five-minute chart it
just sold off literally all day today
now one thing I do want to look at real
quick is you gas because this is the one
we’re all we’ve all been waiting on but
realistically look at what you gas has
done if I back out of this I mean again
look look at where it used to be look at
this up here I mean we’re talking two
hundred and sixty dollars and if I go
back further you can see I mean there
was a point in time where it was trading
500 dollars if we go back further $2,800
if we go back further look at all look
up here that is 38,000 dollars it’s been
doing nothing but declining and
obviously as we disk
more natural gas and we have better
techniques for extracting it and it
becomes easier and faster and there’s so
much there’s just huge volumes of it
under the ground prices have nothing no
they have no choice but to go down so we
got this blip and now we’re running back
down so maybe with cold weather we do
get a little minor pushback to the
upside but I’m starting to wonder if the
overall play is just to continue
trickling down as people – to gas as
they say so comment below let me know
what you think and we’ll see you
tomorrow
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