On Friday "Balance Month" Henry Hub traded as high as $7.65. On Monday it had a range of $4.60 to $5.75. First trade today was $5 and now it's trading $3.24. So down 58% in two days!

But thats trading.

OK we all know that retail FX brokers dont provide access to the interbank FX market (supposedly the most liquid market), but suppose you did have access to the interbank market. What happens when a central bank wants to dump some reserve currency, or some corporate, or look at the bond market, or the Eurodollar market last Friday.

All markets are going to take a bath from time to time. If liquidity falls off, then the average retail trader still hasnt got many problems compared to larger traders who may need 2 days to unwind a position.

You could argue that a less liquid contract isnt going to react as badly, simply because there is less open interest to drive it anywhere - except basis traders perhaps.

Personally, I dont agree about liquidity drying up during the flash crash. If liquidity is measured by the amount of notional willing to be put at risk in such times, then we would never have seen the S&P regain some 40-50% of the initial decline. Thats also a great arguement for HFT as well - they are the ones who brought the market back up. It would be a brave soul who could lift an offer when the markets just come off say 4% or how ever much it was in the last 10 mins!!

More on Europe from John Kemp's "Best In Energy" daily...

EUROPE’s gas prices are falling steadily despite cold weather hitting much of the region as traders anticipate inventories will be more than enough in the event of even the coldest imaginable winter. Northwest Europe is roughly a quarter of the way through the winter heating season. Gas storage facilities are still almost 94% full compared with a prior ten-year seasonal average of less than 82%. After adjusting for inflation, calendar-average futures prices for the year-ahead have fallen to €42 per megawatt-hour so far in December down from €53 in August 2023 and €223 in August 2022:

So is NG the same as Oil in terms of the fundamentals? Basically storage (the EI reports) and geopolitical (war/supply disruption etc). Is there anything else to look out for-does one country have the ability to move prices with a surprise announcement I.e. Russia?

If your talking about US Henry Hub Contracts (CME's "NG" or ICE's "H") then it's far less subject to geopolitical factors than oil. US is a net exporter of NatGas (although New England is an importer in Jan & Feb), and how much it can export is constrained by LNG terminal liquification capacity, so changes in international LNG prices have far less of an effect on domestic prices than say oil. So what does drive prices? Well obviously supply and demand. In the short term this is best represented by weather expectations and storage levels. US production exceeds demand April through October, but falls short of demand November through March. Hence the market is very seasonal, and extremely dependent upon storage. In the long term, production expectations, power generation mix and export capacity are important.

If your talking about Europe (UK NBP, Dutch TTF etc) that's not my area of knowledge.

How cold has it been? John Kemp this morning...

And now its turned warm, and supposed to stay that way for the next two weeks! (Also from John Kemp obviously)