Natural Gas (NATGAS/USD)
What Is Natural Gas (NATGAS/USD)?
Why Natural Gas Moves
Natural gas doesn’t need much to explode. Its price is highly reactive to short-term events and longer-term supply/demand shifts. Here’s what moves it:
Weather forecasts
Cold snaps or heatwaves dramatically shift demand expectations
Storage reports
Weekly EIA inventory data releases on Thursdays cause major spikes
Supply disruptions
Pipeline shutdowns, production halts, or geopolitical events shift pricing rapidly
LNG exports
US export volumes now tie natural gas prices to global markets
USD movements
As with most commodities, dollar strength can influence price direction
Hurricane season
Storms in the Gulf of Mexico routinely impact US supply infrastructure
Natural gas is often referred to as a “widowmaker” because of how violently it can reverse without warning — but with structure and discipline, that volatility can be turned into edge.
How to Trade Natural Gas (NATGAS/USD)
Because of its unpredictability, natural gas demands a reactive, data-driven trading approach. Traders focus on timing, volatility tools, and clear structure zones.
- Event traders center around EIA storage data every Thursday
- Weather-based traders track temperature models and seasonality cycles
- Breakout traders use tight consolidation zones to catch explosive moves
To trade it smart:
- Use ATR to manage position sizing
- Combine MACD with structure to avoid false breakouts
- Track storage forecasts and align setups with the consensus
- Watch correlation with oil and USD but rely more on gas-specific data
Key Characteristics
Volatility
Extremely high — sudden spikes and deep pullbacks are frequent
Liquidity
High, but spreads can widen during event risk
Correlations
Sometimes tracks oil, but often moves independently
Session Behavior
Best action during NY open and EIA data drops
Best Use Case
Volatility trading, event scalps, seasonal swing setups
Example Trading Scenario
It’s Thursday, and the EIA reports a much lower inventory build than expected — bullish for gas. Price is sitting above a breakout zone from earlier in the week.
Volume increases rapidly and a 15-minute engulfing candle forms with no upper wick.
- Entry: Buy at 2.48
- Stop Loss: 2.39
- Take Profit: 2.68
- Risk-Reward: 1:2.22
These EIA-driven trades are fast and volatile — execution discipline is everything.
Summary Checklist
- Asset Type: Commodity
- Symbol: NATGAS/USD
- Volatility: Extreme
- Correlated With: Weather, oil, USD, storage reports
- Best For: Event-based traders, seasonal swing setups, short-term momentum trades