WTF? CL and NG disconnect

schizo

schizo

Any good reason for the disconnect other than the following?

Reason for CL going down: People staying indoors.
Reason for NG going up: People staying indoors.
 
My guess, since NG is a waste product, when you stop drilling for CL, the "waste" product is no longer produced. Now you actually have to go get it if you want it. With this oil crash, many CL drillers might go belly up.
 
IAS_LLC said:
Again, speculating....but low oil price will potentially shutter some U.S oil frackers, that produce nat gas as a byproduct, reducing supply
More...

Agree...I think overall the move by the Saudi's reduce NG supply. This should actually be slightly bullish for NG.
 
The reasons for NG putting in its big rally today.

*Today it tested its 2016 low of 1.611, the day low was printed at 1.610.
* 1.6xx is multi decade price support.
* All that $ leaving oil has to go somewhere. The flight into value, it had been a real dog for a long time.

My resting buy order (MIT) at 1.610 put in weeks ago did not get filled . I will be looking for a lower risk entry to get positioned if price action holds up.

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Mass liquidation event. Imagine a scenario where a fund is short 10 years, long equities. Getting blown out of that. Long crude, blown out of that, short nat gas, etc, etc...In normally functioning markets without margin calls left and right, probably a bit easier to imply cause and effect.
 
We may have a /NG short covering rally sooner or later when big sellers close their short positions to take profits......
 
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