CME Market Sentiment Meter Historical Market Analyses: Natural Gas 2014 North American Cold Wave

By Aaron He & Anish R. Verma

From late 2013 through early 2014 there were severe cold fronts across North America, during which time natural gas futures (NG) prices spiked, peaking in February of 2014. The Market Sentiment Meter (MSM) indicated Complacent and Balanced states before the cold period. As the cold wave became more severe, the MSM indicated Anxious states, which preceded an upward movement in settlement price.

During and following the price spike, the MSM indicated Balanced states. This was indicative of options traders not expecting the gas shortage would persist beyond March, in line with previous years’ supply and demand cycles.

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