Eoin Treacy's view Natural gas and oil share the common characteristic that some of the largest exporters are now consuming much more of their own product. This means that as previously prolific regions decline, exporting nations are increasingly becoming importers.

Prior to the build out of LNG infrastructure, it was difficult to transport natural gas except by pipeline. This situation was not conducive to a global pricing mechanism as is evident in the oil market. However this may be changing with the increasing potential to trade gas globally via super cooled tankers.

US Henry Hub pricing is largely representative of what the US, Canadian and Mexican markets. The depressed pricing structure in the US is in no small part due to the advent of unconventional gas in the domestic USA. We have said for quite some time that shale gas is a game changer for the energy sector and it is a real possibility that the USA will turn into a net exporter of gas over the next decade and or find more uses for the commodity.

US natural gas bottomed in September 2009 and continues to form a base. Prices found support near $3.20 in October and have rallied following the contract change. A sustained move below $4.10 would now be required to question the short-term uptrend and check scope for further upside.

UK traded natural gas found support near 20p in August 2009 and has posted a progression of higher major reaction lows since. While somewhat overextended relative to the 200-day MA at present, a sustained move below 45p would be required to question medium-term upside potential.