April presents an interesting seasonal anomaly in the natural gas market. Over the last 15 years, natural gas prices have increased in 14 of those years during the period between March 30 and April 30. That results in a win rate of 93.3%, which is a remarkably high probability setup for a seasonal trade.
📅 Period: March 30 – April 30
📈 Win Rate (last 15 years): 93.3%
💰 Average Return: +8.5% (Median: +7%)
📊 Direction: Long
Not only is the win rate strong, but the average return is also attractive. The mean return over this period is +8.5%, while the median return stands at +7%. This consistency suggests a strong seasonal tendency rather than random price fluctuations.
Natgas – April Seasonality
| Status | Change | Percentage | Start Date | Start Price | End Date | End Price |
|---|---|---|---|---|---|---|
| UP | $0.2020 | 11.5% | 04.01.2024 | $1.7550 | 04.30.2024 | $1.9570 |
| UP | $0.1340 | 6.1% | 03.30.2023 | $2.1830 | 05.01.2023 | $2.3170 |
| UP | $1.9160 | 36.0% | 03.30.2022 | $5.3290 | 04.29.2022 | $7.2450 |
| UP | $0.2980 | 11.3% | 03.30.2021 | $2.6430 | 04.30.2021 | $2.9410 |
| UP | $0.3080 | 18.9% | 03.30.2020 | $1.6300 | 04.30.2020 | $1.9380 |
| DOWN | $0.1490 | 5.5% | 03.29.2019 | $2.7200 | 04.30.2019 | $2.5710 |
| UP | $0.05900 | 2.2% | 03.29.2018 | $2.7060 | 04.30.2018 | $2.7650 |
| UP | $0.02100 | 0.7% | 03.30.2017 | $3.2100 | 05.01.2017 | $3.2310 |
| UP | $0.1610 | 8.1% | 03.30.2016 | $1.9790 | 04.29.2016 | $2.1400 |
| UP | $0.1060 | 4.0% | 03.30.2015 | $2.6240 | 04.30.2015 | $2.7300 |
| UP | $0.3130 | 7.0% | 03.31.2014 | $4.4820 | 04.30.2014 | $4.7950 |
| UP | $0.3760 | 9.5% | 04.01.2013 | $3.9690 | 04.30.2013 | $4.3450 |
| UP | $0.1420 | 6.6% | 03.30.2012 | $2.1660 | 04.30.2012 | $2.3080 |
| UP | $0.4230 | 9.9% | 03.30.2011 | $4.2600 | 04.29.2011 | $4.6830 |
| UP | $0.03500 | 0.9% | 03.30.2010 | $3.8850 | 04.30.2010 | $3.9200 |
What Drives This Seasonal Strength?
Several factors contribute to this seasonal pattern:
- Supply-Demand Shifts: April marks a transitional phase in energy markets as winter demand fades, but production adjustments may not yet be fully reflected in prices.
- Inventory Adjustments: Storage levels and expectations for summer cooling demand start influencing market sentiment.
- Fund Flows: Institutional positioning and rebalancing could also play a role in supporting prices during this period.
How to Approach This Trade
For traders looking to capitalize on this trend, here are a few considerations:
- Entry Strategy: Consider entering a long position around the end of March, ideally after confirming momentum or a technical breakout.
- Risk Management: While the historical win rate is strong, past performance does not guarantee future results. Proper stop-loss strategies should be in place.
- Exit Plan: The seasonal window extends until April 30, but monitoring price action and market conditions can help refine the exit timing.
Conclusion
Seasonal patterns like this one in natural gas offer traders an edge by leveraging historical tendencies. With a 93.3% win rate and an average gain of 8.5%, this setup is worth considering for those interested in commodity trading. However, as always, ⚠️ managing risk remains crucial.
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