nab2807

Spreading Oil and Natural Gas: A Post-Labor Day Plan

Another note of concern to investors considering this trade. This is essentially a seasonality trade but remember that seasonality can be easily be trumped by overriding market sentiment.

The risk at the moment is that in the short term NG prices are likely to fall given the discovery of natural gas shale in the US.

I anticipate the spread to widen before narrowing as automakers and industrials adjust to natural gas use in place of crude.