Volatility in the natural gas market is always a factor especially in the winter.
The winter 13-14 was also a period of high volatility as shown by the natural gas weekly chart to the left. Each bar represents one week of trade based on the current spot contract.
Winter 13-14 had three primary periods of rapid price movement, two to the upside in the prices and one to the downside as the market sold off from the February price high.
The initial climb higher for winter 13-14 began on November 8th, 2013 with the spot price gaining 34% in 7 weeks.
After topping out at a 4.532 high in December, the market fell lower into early-January 2013 bottoming out at 3.953.
The market had two subsequent price rallies from the January 2013 price low. The first price spike shown in blue lasted 3 weeks during which the spot market price rose by 45%.
A final price rally for the year began in early-February topping out at a 6.493 high later in the month.
Over 7 weeks from the January low, the spot market price gained 2.540 or 64%. From the February high, the market fell by 35% over the following 6 weeks.
As seen during the winter 13-14, bearish sentiment in the market can quickly change.
There are still many months of potential winter heating demand ahead for the natural gas market during which prices could move sharply higher similar to last winter.
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