I have been observing the natural gas market over the past few years, and honestly, there's a lot to learn from how everything evolved. Recently, I started reviewing what happened with the prices and why so many people regret not trading at key moments.

It all began with the invasion of Ukraine in 2022, which shot gas prices to historic levels. But what’s interesting is what happened afterward. During 2023, prices plummeted nearly 73% from their highs, which was a brutal shift in the market. That opened opportunities for those who understood that investing in natural gas isn’t just about betting on the rise.

The reason natural gas became so critical in recent years is pretty obvious if you think about it: it’s more accessible than oil, less polluting than coal, and relatively easy to extract. Between 1973 and 2019, it went from representing 16% of global energy to 23%. That’s no coincidence. As we grow as a civilization, we consume more energy, and natural gas has become the preferred option.

Now, the market fundamentals are simple: supply and demand. But there are many factors that move the needle. Temperature, inventory levels, geopolitics, economic growth... everything influences it. What many don’t see is that investing in natural gas requires understanding these underlying movements, not just real-time prices.

What happened in 2023 was interesting. Europe reduced its demand by nearly 10% in the first half because it had high inventories and the temperatures were favorable. Asia also showed weakness, although China grew a bit. This significantly relaxed the market fundamentals. Prices fell to $2.73, but that didn’t mean the market was dead. In fact, it was the perfect moment for those who knew how to short.

By 2024, everyone expected changes. The projection was that global demand would grow 1.9%, with Asia-Pacific leading. Supply would also expand, especially from Eurasia, the Middle East, and the United States. What most didn’t anticipate was how volatility would continue to be the dominant factor. Prices were expected to rise between 20% and 30%, but the reality was more complex.

This is where many make the mistake of trying to invest directly in natural gas. The volatility is brutal. But there are smarter alternatives. Trading CFDs allows access to these movements without owning the physical asset. Leverage amplifies both gains and losses, so caution is necessary.

What I would recommend is looking at the stocks of producers like Exxon Mobil and Chevron. These companies had returns of 65% and 27%, respectively, since 2022, while spot gas fell 27%. Stocks are less volatile than the raw commodity, which is more sensible for most investors.

If you decide to trade CFDs, you need to understand the parameters: initial margin, maintenance margin, leverage. A standard natural gas contract is 10,000 MMBtu. If it requires a 10% initial margin and the average price is $7.11, then you need $7,114 in your account to control $71,140 of exposure. That’s 10X leverage. Each minimum move of $0.001 equals $10 profit or loss per contract.

Profit calculation is straightforward: multiply the price variation by 1,000 to convert to points, then by the fluctuation and your position size. If you short at 7.11 and buy at 6.99, you gain $1,240 on a 1.74% move. That’s a 17.4% return on your initial margin, thanks to leverage.

But here’s the important part: investing in natural gas with CFDs is risky. Volatility can be brutal. I’ve seen accounts liquidated because traders didn’t respect the stop loss. My rule is simple: never risk more than 3-5% of your capital per trade. Use stop loss and take profit orders. The risk-reward ratio should be at least 1.5:1.

The advantages of this market are clear: it’s highly liquid, allows diversification beyond traditional stocks, and leverage multiplies your gains. The disadvantages are also clear: extreme volatility, demand sensitive to economic cycles, and external factors like weather or geopolitical events can change everything overnight.

My advice after seeing how all this evolved: don’t try to predict the market. Watch the signals, respect your risk plan, and remember that investing in natural gas is more about discipline than luck. Those who made money in these years understood that risk must be managed before opening any position.