Natural Gas Quarterly Returns

Following yesterday's post on how natural gas typically has its best quarterly performance during the third quarter, we received some questions asking if the average was skewed by one or two years. With that in mind, the chart below shows the average and individual quarterly returns for natural gas. While natural gas' best quarter happened to occur in the third quarter of 2005 (99%), Q3 is also positive more often than any other quarter (63% of the time). Finally, the median return of natural gas since 1990 is higher than any other quarter (10.4%), and is also over twice the return of the next nearest quarter (4.5% in Q2).

Comments

[Shale Gas]

Would it be a logical conclusion that the third quarter is best because it is hurricane season in the Gulf of Mexico, and typically there is a supply interruption?

2009 Jun 10 08:43 AM

[H. T. Love]

With the current glut and still too many wells producing, the trend may change. Milder hurricane season predicted. Consumers may set thermostats up to save money during the summer, reducing the need for peak electricity, so NG generators may not run as much.

HardToLove

2009 Jun 10 08:51 AM

[erewhonman]

The big question then becomes: When in the 3rd quarter does one belly up to the bar and buy? The third quarter is complex. You have your summer weather (hurricane issues, although they also bleed over into the 4th quarter) and heat waves. You have storage fill season (although this year it is almost over before summer begins). Summer holidays skew trading and then the mindset transitions from summer view to winter preparation. How does mid to late August sound?

2009 Jun 10 01:36 PM