Natural gas climbs to highest since July 2011 on record supply drop


Natural gas futures today reached their highest levels in nearly two-a-half years as data showed a record drop in U.S. inventories.

Stocks are 7.4% below the five-year average for this time of year, an EIA analyst says, likely the largest deficit to historical level on EIA's records which began in 1994.

Traders are setting their sights on $5/mm Btu gas, last seen in June 2010, but any significant warming trend could send prices down, and gas production is expected to begin hitting record levels as more supplies come on line from Marcellus shale gas fields.

ETFs: UNG, UGAZ, GAZ, BOIL, DGAZ, UNL, KOLD, NAGS, GASZ, DCNG

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Comments (1)
  • Canuck Economist
    , contributor
    Comments (114) | Send Message
     
    Whoa! I was impressed by the storage numbers yesterday! I positioned leveraged long in late October - when I saw my first snow. I also believe the American economy will finally start running better now that Congress gave up on its really really damaging lack of compromise - thank God the craziness is over! Industrial demand for gas will be picking up nicely over the next three months.

     

    Still on weather....this is shaping up as the coldest winter in Canada for a decade or more and US inevitably gets transmitted our cold (our revenge for your giving us economic pneumonia when US catches cold). I think the weather will remain cold into February and I expect the price of natural gas will continue its climb.

     

    Having said that, I took profits (at average of 30%) on half my holdings yesterday and will take the balance when gas hits my target or if weather starts warming up (which is certainly not the case from the current forecasts - ignoring the 3-4 day blip we are now in); I may repurchase some if the price drops significantly during the next 4 days.

     

    We are guaranteed a white Christmas in Ottawa - happy holidays!
    20 Dec 2013, 10:40 AM Reply Like
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