Investors remain cautious around the broader energy space and for good reason, but an attractive trade in natural gas and its producers may emerge within the coming weeks.
TD Securities analyst Chris Dutton pointed out that natural gas typically sees seasonal strength throughout the shoulder months of the spring and fall. His work implies that natural gas prices in the last 25 years possess the highest probability of positive change in March, April, September and October.
Most importantly, he noted, is the fact that natural gas prices over the past five years have risen every April – the only month to demonstrate such consistency throughout the current cycle.
“We feel that the seasonal weakness that people experienced this past winter enhances the probability of an optimistic seasonal trade,” Mr. Dutton told clients.