Every week we provide insights into popular assets and hot questions, so you can easily learn more about the investment market in bite‑sized pieces.
In this Markets in Focus, we take a closer look at natural gas - its role in the global energy mix, the key drivers behind its price, and how traders can benefit from its dynamics through CFD trading.
What Is Natural Gas?
Natural gas is a major energy source around the world. According to the 2025 Statistical Review of World Energy, it now accounts for about 25% of global energy supply.
It’s widely used for heating, electricity generation, and industrial processes — making it a backbone of modern energy infrastructure.
Why Natural Gas Prices Fluctuate
Natural gas prices are notoriously volatile, and several major factors drive this:
- Supply and Demand: Global demand for natural gas rose by 1.9% in 2024, reaching 4,122 billion cubic meters.
- Weather / Seasonality: Cold winters can drive up demand for home heating, while mild seasons can reduce consumption significantly.
- Storage Levels: How much gas is held in underground storage facilities affects price sensitivity - lower storage can lead to supply worries, while high storage can suppress prices.
- Economic Activity: Industrial growth, especially in high‑growth regions like Asia, fuels demand for natural gas.
- Energy Transition: The availability and adoption of renewables like wind and solar can influence gas demand.
Natural Gas in the 2025 Energy Landscape
- Natural gas remains one of the most scalable and flexible sources of energy, often seen as a “bridge fuel” in the transition to cleaner power.
- Despite growing renewable energy use, fossil fuels (including natural gas) continue to supply a significant share of the world’s energy.
- In electricity production, natural gas remains the second-largest source, contributing significantly to global power generation.
Trading Natural Gas Through CFDs
- Using CFDs (Contracts for Difference), traders can speculate on natural gas price movements without owning physical gas.
- This allows traders to go long (if they expect prices to rise) or short (if they expect prices to fall), depending on their view.
- Because gas can be highly volatile, CFD trading offers significant opportunities, especially during supply shocks or seasonal demand spikes.
Risks and What to Consider
- Liquidity & Overnight Risk: Gas markets can be less liquid than other assets. Holding CFD positions overnight may incur financing costs.
- Volatility: Sharp swings in price can work in your favor — or against you. Effective risk management is crucial.
- Macro & Geopolitical Risk: Regulatory shifts, geopolitical tensions, and infrastructure constraints (like pipelines or LNG capacity) can heavily impact gas prices.
Final Thought for Your Trading Week
We wish you a successful trading week on the Change App - whether you’re trading natural gas or exploring other markets.
Stay informed, manage risk, and be ready to capture opportunities from energy market dynamics.
Until next week!
