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Simon Jacques is the author of the Trade Shipping and Finance Wizard covering AG markets, Dry-Bulk and the Energy Marine Trade.
My blog:
Navigating the Commodity Markets with Freight and Spreads
  • Natural Gas Gears Up For The Hurricane Season Part II 0 comments
    Aug 28, 2014 10:49 PM | about stocks: UNG, CHK

    As I said in Natural Gas Gears up for the Hurricane season and Winter Pricing:

    "As we are legging into September, it will be interesting to see what effects a mini heat spike and the hurricane season will have and after that the winter pricing."

    "In case of changes in the weather forecasts, the Day-ahead market will not feel the heat because record production will act as a cushion for higher cash prices."

    Hurricane Cristobal will hit Panuke Platform tonight...

    Forecasters tracking Hurricane Cristobal say there could be wind and rain in excess of 50 millimetres in parts of Atlantic Canada starting Thursday and continuing Friday.

    140 km/h WIND...

    Panuke, the platform supplying New-England should be totally evacuated with the Helicopters by this afternoon.... Production will be shut-down for at least 3 days, Fri, Sat, Sun. It is major for the Boston Market.

    Now for Henry Hub:

    Above-normal temperatures will sweep from Texas to the Northeast through Sept. 10, according to MDA Weather Model.

    This is the late-summer heat that the Natural Gas Market was seeking.

    Futures

    In Chicago, the CME Henry Hub October, which represents the near-term expectations has gained a respectable 25c to $4.05 since August 15th.

    ETF

    UNG, The United States Natural Gas ETF, has done 1$ over the same period. It's maybe just not a proper vehicle for a long or short position in the current markets considering the contango and roll risk.

    I don't think you should invest in UNG, it's a leverage vehicle poorly tracking its underlying.

    Sources: http://www.bloomberg.com/news/2014-08-28/natural-gas-climbs-as-heat-limits-inventory-gain.html

    http://www.cbc.ca/news/canada/nova-scotia/hurricane-cristobal-to-bring-wind-rain-to-atlantic-canada-1.2749089

    http://jacquessimon506.wordpress.com/2014/08/25/natural-gas-is-gearing-up-for-the-hurricane-season-and-winter-pricing/

    Themes: natural gas Stocks: UNG, CHK
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