Instrument : &GAS/OIL
The personal composite instrument &GAS/OIL reflects the price dynamics of natural gas against American light crude oil West Texas Intermediate (WTI). The base part of this instrument is composed of 10 million British thermal units (10 mmBtu) of natural gas, and the quoted part - 1 barrel of crude oil of the WTI grade.
The base part is represented by the #C-NATGAS instrument – the continuous CFD on natural gas futures from the Henry Hub American terminal. Oil is represented by the instrument OIL- the continuous CFD on WTI oil futures. It should be noted that the &GAS/OIL spread instrument is used for arbitrage and trading inside a price channel: buying near the support line, selling near the resistance line. You can find the theoretical foundations for the index formation in the “Application field” section below.
|&GAS/OIL||№||Asset||Volume / 1 PCI||Percentage||Volume (USD) / 1 PCI||Unit of measurеment|
|Fixed spread, pip||170||170||170|
|Floating Spread, pip||170||170||170|
|Order distance, pip||-||-||-|
|Swap (long/short) in pips on Vol||-27.142 / -6.287||-27.142 / -6.287||-27.142 / -6.287|
|>=0.13||0.01 – 1.13||>=0.01|
|The value of 1 pip in USD for the Vol||0||0||0|
|Week day||Trading hours (CET)||Local trading hours|
|Monday||01:00 — 23:00||01:00 — 23:00|
|Tuesday||00:00 — 23:00||00:00 — 23:00|
|Wednesday||00:00 — 23:00||00:00 — 23:00|
|Thursday||00:00 — 23:00||00:00 — 23:00|
|Friday||00:00 — 23:00||00:00 — 23:00|
Characteristics of the personal composite instrument:
We do not exclude the possibility of continuing downtrend in oil markets. At the same time the natural gas prices may rise as investments in natural gas extraction industry fall proportionally with increasing investments directed towards expanding oil production. In 2008 the traditional gas output in US exceeded shale gas production by a factor of 7. Wherein the shale gas production accounted only for 11% of total output of natural gas. Last year the shale gas production exceeded the traditional gas output by 6% and the shale gas production accounted for 40% of total natural gas production in US. The number of wells was increased by 10.5 thousands to substitute the conventional gas with shale gas production. Perhaps part of this equipment could be reconfigured for shale oil production.