How Does Seasonality Impact Energy Markets?

Seasonality refers to supply and demand fluctuations that occur thanks to the time of year. Seasonality often impacts the commodities market. For instance, sweet corn is “in season” from early July until late September. During these months, there will be a spike in supply, which should drive down demand. However, outside of these months, supply will lag which will drive demand.

Although seasonality is not an exact science, it is more predictable than outlier events like a global crisis. Because it is a bit predictable, traders should take the time to understand the concept and work it into their investing strategy. One of the assets that seasonality seems to impact most is energy. No matter if you’re trading crude oil commodities or are looking to hedge risk with weather-trading strategies, understanding seasonality should serve you well.

How Seasonality Affects The Futures Market 

Energy assets are often traded on the futures market, where traders have a significant impact on the future market price. Traders on the futures market have an anticipatory mindset, where they purchase contracts based on what they think is going to happen. The futures market is exciting because it doesn’t so much have to do with what investors think energy is worth today, but rather than they feel the value will be at some point down the road, whether it’s:

  • Tomorrow
  • One year from now
  • Five years from now

Accordingly, seasonality has a significant impact on the futures market as investors look to find an accurate price that reflects the actual value of the commodity. Because there are four different seasons in North America, seasonality becomes even more critical.

How Seasonality Effects The Energy Market 

Let’s take a look at two of the more common futures energy contracts in North America to see just how critical seasonality can be. West Texas Intermediate Crude Oil and Henry Hub Natural Gas are two of the leading unrefined energy future contracts. West Texas routinely appreciates during spring and supper and then depreciates in the second half of the year. A spike in demand typically occurs between Memorial Day and Labor Day.

Henry Hub, on the other hand, is a bit opposite. This futures contract peaks as winter approaches since investors expect an increase in demand as consumers’ heat consumption increases. Consider some of the futures trades that investors placed in Fall 2018, where they drove the anticipated January 2019 price by more than 60 percent.

What About Weather Trading? 

Most investors think about weather trading alongside seasonality, and rightfully so. Experts have long examined the correlation between weather patterns and the futures market. Learning more about weather trading could make you a better futures investor, as it would provide you with more anticipatory insight.

However, both weather trading and the futures markets are difficult topics to understand. New investors in Manhattan should take the time to learn about both before entering into the market. Extensive knowledge will help mitigate losses and will put investors in the best position for success.

US LAW requires trading and trading education accompanied to post legal disclaimers as to market and personal performance, as well as investment risk. Please carefully read and study the Legal section of this website and any agreement you sign. Any agreement to doing business with website or Delta Trading Group, Inc is verification that you have read, understand, and agree to the terms of risk associated with futures trading and financial investing as described.

Important Futures Trading Disclaimer

Trading futures and options involves the risk of loss. Please consider carefully whether futures or options are appropriate to your financial situation. Only risk capital should be used when trading futures or options. Investors could lose more than their initial investment. You must review customer account agreement prior to establishing an account.

Past results are not necessarily indicative of future results. The risk of loss in trading can be substantial. Carefully consider the inherent risks of such an investment in light of your financial condition. Though proper education, tools, and practice are necessary, they do not guarantee profitable results. 

Education Oriented and the Delta Trading Group, Inc. are educational entities; be sure to consult with your financial advisers, brokers, and other professional services about the risk of trading. Though we offer a common language to learn about trading and risk, we are not a signal service. You must use your own discretion when doing any kind of trading in any financial market. and the Delta Trading Group, Inc. are not responsible for interpretation, opinions, or losses by its members, liaisons, instructors, mentors, vendors, contractors, or administration, as none of these entities can guarantee your success. 

Internet Trading Risks

There are risks associated with utilizing an Internet-based deal execution trading system including, but not limited to, the failure of hardware, software, internet connection, or services provided by third parties. Since and the Delta Trading Group, Inc do not control vendor signal power, its reception, or routing via Internet, configuration of your equipment or reliability of its connection. We are not be responsible for communication failures, distortions, or delays when trading via the Internet. 

Accuracy of Information

The content on this website is subject to change at any time without notice, and is provided for the sole purpose of assisting traders to make independent investment decisions. and the Delta Trading Group, Inc have taken reasonable measures to ensure the accuracy of the information on the website. The company does not guarantee its accuracy, and disclaims liability for any loss or damage which may arise directly or indirectly from the content or your inability to access the website, for any delay in, failure of the transmission, or the receipt of any instruction or notifications sent through this website.


This site is not intended for distribution, or use by, any person in any country where such distribution or use would be contrary to local law or regulation. None of the services or investments referred to in this website are available to persons residing in any country where the provision of such services or investments would be contrary to local law or regulation. It is the responsibility of visitors to this website to ascertain the terms of and comply with any local law or regulation to which they are subject.


Your broker may have a contractual agreement not to seek redress for slippage, it’s obligation to execute stop loss orders at the stop loss price or better, will not apply to limit and stop loss orders during hours when it is closed. This also does not include bad price spikes. Bad price spikes are removed from the price charts quickly to alleviate confusion.