Natural Gas - A Report Brought to You by Q8 Trade

What is natural gas

Natural gas is a non-renewable energy source, and it is an alternative energy source for oil from highly efficient, low-cost and low-emission fuels.

Natural gas is an important primary energy resource for the chemical industry. Natural gas consists of plankton, which are microscopic organisms that include algae and the primary organisms that have died and accumulated in the layers of the oceans and the earth, and these remains were compressed under sedimentary layers, and over thousands of years both the pressure and the heat resulting from these sedimentary layers transformed these organic materials into natural gas, and not Natural gas is very different in composition from other fossil fuels such as coal and petroleum.

Since petroleum and natural gas are formed in the same natural conditions, these two hydrocarbon compounds are usually found together in underground or water fields, and generally the sedimentary organic layers buried in depths ranging between about 1,000 to 6000 meters and at temperatures ranging between 60 To 150 degrees Celsius produces oil, while those buried at deeper distances and at higher temperatures produce natural gas, and the greater the depth of the source the more dried, meaning that the proportion of condensate in the gas decreases.

After the gradual formation in the earth’s crust, natural gas and petroleum slowly leak into small pits in the nearby porous rocks that serve as reservoirs to store the ore, and because these rocks are usually filled with water, therefore oil and natural gas are both lighter than water and they are less dense than the surrounding rocks, they move Up through the crust sometimes long distances. Eventually some of these hydrocarbons transported from bottom to top are trapped through an anti-porous layer (that is, impermeable to water) from rocks known as cap rocks, and because natural gas is lighter than petroleum, it creates a layer above petroleum called a gas cap Cap).

Petroleum must be accompanied by a gas called AssociatedGas. Coal mines also contain quantities of gas called methane, which is the main component of natural gas. In sedimentary coal layers, methane is often dispersed through the pores and cracks of the mine. This type is usually called methane. Coal mines.

Global reserves

Due to the high level of the material level of human beings in the whole world, their energy consumption has increased dramatically, in order to drive the cars that carry them and transport them to their workplaces, and for electrical energy as well, which has become indispensable in modern civilization, and much more.

As the energy sources in the world are considered depleted and non-renewable, therefore, the proven reserves of “oil or natural gas” for a field are defined as the recoverable quantity over the life of the field in light of the prevailing technology and economic considerations, according to the definition of the American Oil and Gas Journal. Specialized, proven reserves of natural gas are defined as: quantities that can be extracted in light of what is currently known from prices and technology, while the French Cedigas Authority defines it as: discovered quantities that are reasonably certain of the possibility of production under economic conditions Yeh and technical prevailing.

The first definition is the most conservative so we find that the global natural gas reserves in the first of January of 1999, according to an estimate of the Journal of Petroleum and Gas, decreased by about 7% from the estimates of Sidijaz, and that the natural gas reserves of the Far East region were, according to the magazine, reduced by 30 % Of Sidijaz estimates.

It is worth noting that both definitions are subject to personal estimates rather than fixed objective criteria that can be measured accurately. Therefore, some countries resort to overestimating their reserves and call them proven reserves, for the sake of many political and economic reasons, such as the desire to borrow operations to guarantee their wealth. Petroleum and gas, in addition to that the international oil companies also sometimes tend to exaggerate the estimates in order to strengthen their financial positions or to justify their abundant production operations, or to justify the possibility of export outside the producing countries.

Examples of inaccuracies in the petroleum wealth reserves accounts include what the State of Mexico has done to reduce its proven natural gas reserves by more than half by an amount of about 64 trillion cubic feet in 1999 to reach about 30 trillion cubic feet during the year 2000, and also the establishment of Britain during The 1990s reduced their proven oil reserves by the same amount. It is considered the largest natural gas reserves in the world in the Russian Federation and has a capacity of about 1680 trillion cubic feet.

Natural gas trading

Natural gas trading


Natural gas trading advantages

  • Add natural gas to other primary commodities and currencies and form a diversified investment portfolio through one account.
  • Some currencies, commodities and indices may have a link to natural gas, which can also provide some useful information and data for traders and investors, to contribute to assisting them in their trade.
  • Maximizing the purchasing power of citizens by using a customizable leverage of up to 1:66, according to what is permitted by the local laws and regulations.
  • Natural gas is more abundant in relation to other energy sources, as assuming stable levels of production, it is expected that global proven stocks of natural gas will continue for a period of approximately 65 years, while the expected period of crude oil is estimated at only 41 years.
  • Natural gas is one of the clean energy supplies due to the low rates of carbon dioxide emissions when it is burned, and the technology of drilling operations used in the production of natural gas has witnessed remarkable progress in recent years, which made it among the main commodities that are used to cover energy needs in the market in the future.
  • Automatic ignition temperature-650-700 ° C.
  • Octane number – 120-130.
  • Lighter than the air about twice as much.
  • Able to self-ignition when applying sparks and without it at a certain temperature.

There are 3 main types of natural gas:

  1. Dry natural gas.
  2. Lean gas which is called a mixture containing a small amount of heavy hydrocarbons.
  3. The composition of natural gases differs markedly from one another, from one field to another, whether in terms of the number of hydrocarbon and non-hydrocarbon elements, or in terms of the concentration of elements involved in their composition “in quantity and quality”, due to the varying depths of the laying of the producing layers.

Trade natural gas with Q8Trade

Investing in natural gas has been a very complex activity, but traders can currently speculate on natural gas prices by using short and long-term CFDs.

Contracts for Difference (also known as Contracts for Difference) are contracts concluded between a trader and a broker, which are basically negotiable instruments, and they reflect the movement of associated assets, and allow the trader to execute trades without having to physically possess any commodity.

It is worth noting that the CFDs allow traders to be able to sell, if they believe that the price of natural gas will decrease, yet the trader is still able to take advantage of the distinct leverage provided by the broker. As an example of sales operations, let’s assume that the price of gas is traded at a level, for example, $ 3.100, and after carrying out the research process, we expect high demand for fossil fuels “natural gas” due to the cold season and therefore we expect high price of natural gas, it is possible to buy shares from Let’s say about 5 lots, which is equivalent to 500 contracts at the offered price, and after two days the gas is traded at 4.1300 and it was decided to sell the shares and close the deal.

Thus, the profits of this trading are as follows: 4.133-3.1100 x 1 lot x 500 lots = $ 510.

It is also worth noting that the supply and demand for natural gas is highly predictable from the supply and demand for crude oil, and for this reason it has become easier to expect gas prices, which made the gas trading market able to attract a large audience of traders.

The most important and most prominent report that natural gas traders use as a reference for them is the natural gas report issued by the Ministry of Energy, where this report is issued on a weekly basis, and provides a detailed detailed view on the net changes in natural gas storage levels in the eastern / mid-west and southern and western regions This information is an important provider for a deeper understanding of the levels of supply and demand for natural gas in the market, and these are critical factors in determining gas prices.

Trade natural gas CFD with Q8 Trade

Trade natural gas CFD with Q8 Trade


How to trade in natural gas

When it comes to trading energy commodities, there is no doubt that oil is the most prevalent, but oil is not the only destination for traders looking for different ways to diversify their trading portfolios. Natural gas trading is somewhat different from oil trading, as it is the second most traded energy commodity.

Although the electricity market is the main consumer of natural gas, the majority of applications related to natural gas are applications related to its use for domestic purposes.

What affects gas prices?

As with other energy commodities, demand and supply are the main factors in determining gas prices. The following are the factors that affect supply and demand in the natural gas market:

Natural gas extraction and processing: Natural gas extraction and processing are very costly operations, as natural gas is found along with oil reserves, so the process of extracting it requires a great deal of use of some machinery and energy. Any interruption in the extraction process leads in turn to the delay in the production of natural gas, which leads to a decrease in gas supplies and consequently increases prices, just as natural gas processing operations are more expensive and that any disruption or interruption in this process will have a significant impact on gas prices.

Seasonal demand patterns and weather conditions: The demand for natural gas is also seasonal, as it is related to weather changes, for example during cold weather or in the winter, the demand for natural gas increases for use in heating purposes which contributes to increasing its prices. As for the hot weather period, and during the summer, the demand for the product decreases, but it increases due to the purposes of electricity generation, due to the high rates of use of air conditioners and refrigeration devices.

Accidents and disasters: The catastrophic events that affect the extraction, processing, distribution and consumption of natural gas will have direct results on gas supply levels and rates of demand. Operating disturbances directly delay and reduce gas supply levels, which contributes to significantly higher prices during the recovery period. The American people are the number one people among the gas consuming people, and the Russian people are ranked second, then the third people come to China, followed by the Iranians, as these countries import and use the largest quantities of natural gas for heating and electricity generation operations. Demand rates in these countries help push the price of natural gas to rise, and for this reason any sudden change in demand operations in any of these countries will lead to price fluctuations in natural gas significantly.

Gas production and processing

Natural gas is extracted from wells similar to oil wells, and the natural gas is classified into associated gas and non-associated gas. If natural gas is present with oil in the same field, it is called associated gas. If the field contains only natural gas without oil, it is called non-associated gas.

There are many puzzle pools at a distance from the beach and gas is transported by pipelines from the coastal production platforms to a collection point on the beach and from there to the gas refinery where it is purified from impurities and unwanted vehicles.

Natural gas production and processing

Natural gas production and processing


Gas fields are found both in the seas and on land. Natural gas is processed through different chemical and physical processes, depending on the composition of the natural gas. Gas consists of light hydrocarbons, but the gas may contain undesirable compounds such as sulfur compounds, mercury, water, and others.

These compounds must be disposed of or work to reduce their concentrations to globally determined levels. In the first purification stage, the water and any other liquids are removed from the gas through the water removal unit, then the acid gases are removed from the gas through the acid gas removal unit, and the gas is dried again.

In the event that it contains the two compounds, the absorption units and physical solvents are used for disposal. Then methane is sent to the market for power plants or others. Heavier vehicles such as ethane, propane, butane, and liquefied petroleum gas (LPG) are recovered and liquefied as feedstock for petrochemicals, or packaged in bottles as fuel for heaters and home cooking stoves.

The remainder of the natural gas can be pumped through supply networks or it can be liquefied by refrigeration and pressure and marketed as LNG.