Spot Gas prices rose a little in the East and out West, while the remainder of the country continued to enjoy significant drops due to the predominantly mild weather. As a result, the National Avg. of NGI’s Spot Gas declined 6.0 cents to $5.065. At the start of the week, futures trading action remained dominated by volatility, as it had been over the previous month. After peaking above $5.800, the November Nymex contract fell to an intraday low of $5.308 before recovering slightly.
According to the Schork Group last week, daily volatility was roughly 81 percent, or to a one standard deviation daily price fluctuation of $2,924 per contract. Thus, according to Schork analysts, traders who hedged their European Gas exposure in June must be “sucking wind today” because of the record high prices that have materialized during the summer and into the fall.
According to The Schork Group, daily volatility on the Dutch Title Transfer Facility November contract has climbed to about 134 percent from approximately 35 percent since June. This indicates that a daily price fluctuation of about one standard deviation has increased from $2,479 to $24,865 per contract. In Asia, there has been a comparable exponential growth in daily volatility.
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