Natural gas prices have been surging recently and that has resulted in some major concerns about a so-called ‘energy crunch’. Furthermore, natural gas inventory levels have been really low, particularly in Germany, and that has been boosting prices. So, the question now is, ‘ will the weak seasonals come into play or will the low inventory levels keep prices supported? Natural gas is a tricky market to trade right now, but with recent blow off price action from early October, it might be due a deeper pullback.

Over the last 10 years, WTI crude has fallen 08 times between October 31 and December 30. The average loss has been -10.57%. The largest gain was +20.57% in 2013 and the largest loss was -28.69% in 2020.

Major Trade Risks: The main risk to this trade is natural gas resuming its uptrend on a cold winter in Europe and falling inventory levels.