Natural Gas and Oil Complex Diverge

One thing we track at Bespoke Weather is how the often weather-driven price of natural gas is acting in comparison to other commodities in the energy complex. One part of a Note this morning to clients looked at the recent divergence between natural gas and crude oil/oil products. Yesterday we saw natural gas prices sell off hard but oil prices remained steady, actually ticking up a bit on the day. 

Granted, on a longer-term chart this looks a bit less impressive, especially given the volatility in natural gas (and the longer-term chart almost makes this recent move look like convergence), but it is clear that recently they have been moving in opposite directions. 

Yet what we found more interesting was the recent divergence between heating oil and natural gas, both of which are primarily heating fuels. 

These two tend to correlate a bit better, though the recent Harvey-inspired heating oil supply shortage seems responsible for the most recent diverging leg. Even still, since Harvey we have seen heating oil prices continue higher over the past couple of weeks while natural gas prices attempted to rally but reversed hard yesterday. This is just one more piece of the puzzle to keep an eye on in the energy complex.