Energy futures seasonality

[Naked shorts]

So I thought it might be interesting to plot quotes for consecutive futures contracts to see what the market was expecting the underlying commodity to do.

One interesting thing I stumbled upon was the difference between crude oil and natural gas contracts (I have attached graphs below). Does anyone have any suggestions for the lack of seasonality shown in the oil contracts? My initial guess was that crude actually isn't very affected by seasonality, but to see the expected price show an almost linear relationship seems a little weird.

Also, the seasonal charts for oil on here, http://www.timingcharts.com/index.php, don't show any resemblance to what is being priced in by the market (refer to the third picture I have attached).

 

[Naked shorts]

A bit too complex for ASF methinks.....

 

[Uncle Festivus]

No, I'm all ears, tell me more

 

[beerwm]

All those northern hemisphere countries use gas as a heating fuel during the winter,

I guess majority of oil is used for plastics/petrol - non-seasonally affected markets.

edit:

oil is probably easier to stockpile [but not sure]

 

[white_goodman]

thats one thing im looking at getting atm, jsut finished the Larry Williams book, ive got the COT shi-t down, jsut need to find reliable seasonals... didnt know timingcharts had seasonals thought it was only for COT charts.

Pretty sure oil is more seasonal than that, in my mind for some reason i think it peaks in nth american summer (though this is just a hunch based on something I may/may not have heard ages ago on bloomberg podcast)

EDIT: yeah found it, silly me its right in front of me, and as suspected oil picks up in OUR winter months (nth hemisphere summer) with natural gas peaking for longs seasonally in Dec/Jan (winter heating I presume). Natural gas could really be a nice play in coming months, based upon how sold off it is... or it could still be dog shi-t haha. ALso note currencies are also seasonal, cant remember why, but Larry explained it in his book (ie too lazy to go re-read it atm)

NOTE: market commentators will always find a reason why futures wont go according to historical seasonality, citing this this and that reason.. but if you get signals with seasonality its a nice confirming factor

 

[Naked shorts]

thats one thing im looking at getting atm, jsut finished the Larry Williams book, ive got the COT shi-t down, jsut need to find reliable seasonals... didnt know timingcharts had seasonals thought it was only for COT charts.

Pretty sure oil is more seasonal than that, in my mind for some reason i think it peaks in nth american summer (though this is just a hunch based on something I may/may not have heard ages ago on bloomberg podcast)

EDIT: yeah found it, silly me its right in front of me, and as suspected oil picks up in OUR winter months (nth hemisphere summer) with natural gas peaking for longs seasonally in Dec/Jan (winter heating I presume). Natural gas could really be a nice play in coming months, based upon how sold off it is... or it could still be dog shi-t haha. ALso note currencies are also seasonal, cant remember why, but Larry explained it in his book (ie too lazy to go re-read it atm)

NOTE: market commentators will always find a reason why futures wont go according to historical seasonality, citing this this and that reason.. but if you get signals with seasonality its a nice confirming factor

To bring up the seasonal index in the Timingcharts website, the button is in the top right corner.

Whats the name of the Larry Williams book? Will have to add it to the list.

I dont think the money is really in buying/selling a commodity/whatever outright, its in playing the calendar spreads.

 

[white_goodman]

To bring up the seasonal index in the Timingcharts website, the button is in the top right corner.

Whats the name of the Larry Williams book? Will have to add it to the list.

I dont think the money is really in buying/selling a commodity/whatever outright, its in playing the calendar spreads.

Trade Stocks and Commodities with the Insiders: Secrets of the COT Report

I reccomend

someone give me heads up on some aussie natural gas stocks...

 

[wayneL]

For those who really want to get into seasonals, try www.timeandtiming.com

It's a subscription, but excellent.