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With volatile natural gas prices, oil could become volatile too

Ingrid Pan

Key ways to trade oil and gas price movements on Ukraine tension (Part 1 of 5)

Volatility

In this series, we discuss what caused volatility in natural gas prices in 1Q14 after a long period of relative stability as well as several ways investors can play movements in natural gas prices.

The below graph displays the trailing one month standard deviation for natural gas prices. Higher standard deviation indicates higher volatility. Standard deviation is a measure of how far away individual price points are from the average over the period.

We’ll also discuss the effect of escalating political tensions between Russia and Ukraine, and what impact they have (if any) on oil prices.

The major commodity ETFs we’ll discuss include the United States Natural Gas Fund (UNG), the United States 12 Month Natural Gas Fund (UNL), the United States Oil Fund (USO), the United States Brent Oil Fund (BNO), and the United States 12 Month Oil Fund (USL).

Continue to Part 2

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