Lesson 3 Activities

Fundamental Factors Activity

Part of the overall objective of this course is to have you understand how the market functions in terms of determining price and how it trades in general. To truly appreciate this, you have to begin to think like an energy commodities trader. To do so, you must consider the market factors that they research before making any buy/sell decisions.

In Lesson 2, you were presented with a number of “fundamental” factors that can influence the price of crude oil and/or natural gas.

Beginning this week and continuing until further notice, you will submit Fundamental Factors assignments in the respective Lesson in Canvas every other week by 11:59 p.m., Eastern US Time, on Tuesdays. Instructions for the Fundamental Factors assignments can be found under the "Resources" section of this website.

Links to their energy commodity prices (Henry Hub Natural Gas Futures and Light Sweet Crude Oil (WTI)) can be found in the course "Resources" menu on this website and the Lesson 3 Module of Canvas.

You are to submit ALL of the same fundamental factors for both crude and natural gas shown in Lesson 2 and give your opinion on how they impact prices for oil and natural gas. Fundamental Factors assignments should be submitted to the Fundamental Factors Dropbox on Canvas for each week.

Grading Criteria

A detailed grading rubric for the Fundamental Factors activities is available at the bottom of the instructions.

An example of a complete answer would be:

Natural Gas

The Energy Information Agency’s Weekly Natural Gas Storage Report showed an injection of +50 Bcf. This was below the expectation of +60 Bcf, therefore, it was seen as “bullish” since less supply was put into storage implying that demand was higher than expected. Prices would increase under this scenario. Total gas in storage now stands at 1.5 Tcf which is below the 5-year average as well as last year at this time.

Quiz

Return to Canvas to complete the L3 Quiz.