Natural Gas Fair Price Model

Click below for full details on each element concerning Natural Gas Investing:
Intraday Price & Volatility Data
Fair Price Model
Natural Gas ETF Futures Holdings
Money Manager Long & Short Positions

Jump To: | Fair Price Basics | Realtime Fair Price Analysis | Front-Month Fair Price Historical Data | 3-Contract Average Historical Data |

What Is The Fair Price & How Is It calculated?

The natural gas fair price is a projection of a neutral level for natural gas based on the following elements:

1.) Storage Surplus Or Deficit Versus The 5-Year Average: Gas prices have long corresponded to underground storage with a large deficit associated with higher prices & a large surplus with lower prices.

2.) European Inventories & Prices: Over the past 5-7 years as LNG exports have emerged, US gas prices have established some level of tracking with European (TTF, NBP) and East Asian (JKM) price points, which themselves are tied to local inventories.

3.) Supply/Demand Imbalance: A tight supply/demand imbalance, even in the setting of a storage surplus, is historically associated with higher relative prices. The opposite is also true in that a weak imbalance can overcome a large storage deficit & lead to lower prices.

4.) Seasonality: Due to increased uncertainty associated with the adequacy of storage & wintertime temperatures, gas prices heading into the heating season often carry a premium.

Current & Projected Natural Gas Fair Price

Observed & Projected Fair Prices For Natural Gas Futures & ETFs

Historical Comparison: Front-Month Contract

Fair Price data based on the front-month contract. This is most pertinent for those with a short-term outlook on natural gas.

3-Month History: Front-Month Fair Price Versus Futures Price

Front-Month 6-Month Percentile Rank

Historical Comparison: 3-Contract Average

Fair Price data based on the average of the first 3 futures contracts (front-month, T+1, and T+2). Compared to the front-month contract only, this is a more forward-looking comparison as it deals with projected storage and pricing. It may also be more pertinent for natural gas ETFs as these often hold T+1 (UNG) and even T+2 contracts (BOIL/KOLD).

3-Month History: 3-Contract Average Fair Price Versus Futures Price

3-Contract Average 6-Month Percentile Rank

Disclaimer: Natural Gas & Oil Storage Projections, Intraday Natural Gas Stats, pricing data, commentaries & fundamental pricing models are released by Celsius Energy as experimental products. While they are intended to provide accurate, up-to-date data, they should not be used alone in making investment decisions, or decisions of any kind. Celsius Energy does not make an express or implied warranty of any kind regarding the data information including, without limitation, any warranty of merchantability or fitness for a particular purpose or use. See full Privacy Policy