Seeking Alpha

Natural gas soars after bullish supply data

  • With natural gas in storage at more than a decade low, there needs to be plenty of inventory-building this spring and summer, but the season is off to a slow start with the EIA reporting a build last week of just 24 bcf vs. 36 bcf expected. Stocks today stand at 850 bcf, 50% off the level from one year ago and vs. a 5-year average for this time of year of 1 trillion cubic feet.
  • Futures jump in response, with the May 2014 contract up 4% to $4.707. UNG +3.5%
  • ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, KOLD, UNL, NAGS, DCNG
Comments (14)
  • stringed
    , contributor
    Comments (6) | Send Message
     
    I don't get it! Powerburn wrote "I expect a reported injection of greater than 15 BCF to be viewed as bearish with prices likely to give back some of the past week’s gains. Should natural gas break out today above $4.70/MMBTU, I will plan to initiate a small short position in DGAZ."

     

    Well, the injection report at +24 BCF is significantly higher than 15, yet NG is exploding upwards with May futures at $4.707. What the....???
    17 Apr, 12:06 PM Reply Like
  • Hungry for Knowledge
    , contributor
    Comments (345) | Send Message
     
    Stringed, there is no way to win at investing in natural gas futures.
    Let me encourage you to purchase dividend paying equities that will benefit in the upcoming, multi-year (decade?) slow-and steady upwards rise in natural gas prices that will us sleep well at night:
    Names like VNR, BBEP are MLPs that hedge for 3-4 years out. ECA, UPL, EQT, BIREF, AAV, PEYUF are some others. I own them all and all are doing well. Look at their multi-year charts of price - no fancy technical analysis needed - and you'll see how low they were as nat gas was on the way from $10 to $2....and look at them now as gas goes back from $2 to $10.
    Hope that helps.
    Gas futures are just gambling. You'll never win long term.
    17 Apr, 01:09 PM Reply Like
  • dnpvd51
    , contributor
    Comments (1913) | Send Message
     
    You are a week late with Powerburn.

     

    We have a bear number for last Thursday.
    17 Apr, 01:54 PM Reply Like
  • ParisJOM
    , contributor
    Comments (188) | Send Message
     
    "there is no way to win at investing in natural gas futures"

     

    That is a very affirmative statement which seems to come from one who knows litle about the nat gas market.

     

    Term structure alone in nat gas can provide savvy and patient traders with a significant edge.

     

    To dismiss nat gas an an investment grade asset is rediculous.
    20 Apr, 08:24 AM Reply Like
  • papayamon
    , contributor
    Comments (1058) | Send Message
     
    that's telling me to buy more DGAZ.
    17 Apr, 12:29 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    NatGas is in a bubble.
    17 Apr, 01:14 PM Reply Like
  • Hungry for Knowledge
    , contributor
    Comments (345) | Send Message
     
    inventories are at their lowest levels in over 10 years....it will be interesting to see if production will be ramped up to fill it.
    I personally don't believe we're in a bubble, as the prices are too low for incremental production to be brought online.
    17 Apr, 01:23 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    http://n.pr/1hoDdCM

     

    -and-

     

    http://bit.ly/1hRoaIa
    17 Apr, 08:20 PM Reply Like
  • Hungry for Knowledge
    , contributor
    Comments (345) | Send Message
     
    A few years ago a large pipeline MLP proposed building a large pipeline to ND to carry away the oil/gas, and couldn't get enough 20 subscribers to justify it. WIsh I remembered the name of the pipeline firm, but hey, you have your opinion, I have mine. I'm earning dividends regardless, and eventually prices will rise, whether it's 2 years or 10.
    22 Apr, 01:04 PM Reply Like
  • dscassel
    , contributor
    Comment (1) | Send Message
     
    Stringed, the report that you are refering to was from last weeks prediction. The problem with Powerburn is that there are little to no updates anymore. It has gone downhill in that regard for the past few weeks.
    17 Apr, 01:44 PM Reply Like
  • Henri DeToi
    , contributor
    Comments (353) | Send Message
     
    It all depends what and when you read it. One day at the beginning of the week, you read about analysts projecting a certain amount of injection, then as we get closer to the government report, the number changes until the report comes out. Then when it comes out, you read about analysts having predicted a number way out of whack with what you had read previous to the report. These figures are so bogus that it has become a charade.

     

    Just this week, we were reading about a projected injection of 20 bcj, and then the next day, it had changed to over 30 bcf. Now after the report came out at 24 bcf, they say that analysts had projected 36 bcf. There are so many schemes devised by the big market movers in order to trick the small players that if you are not sufficiently experienced, you will keep falling into their traps until you have no money left.

     

    Anyone entering the natural gas trade should realize that it is a ruthless game.
    17 Apr, 07:54 PM Reply Like
  • lodstar33
    , contributor
    Comment (1) | Send Message
     
    This reeks of HFT manipulation along with the big guys as last week with a build of only 4 bcf it reached only 4.706 and fell to 4.486 till this morning's EIA report. Next week will be interesting to see if it breaks up to 5 or drops to technical levels of 4.5 that the producers are wanting. Seems to be a price fix and trading manipulation game going on.
    17 Apr, 08:58 PM Reply Like
  • Henri DeToi
    , contributor
    Comments (353) | Send Message
     
    They want us small fires to keep guessing; certainly a game where it is not easy to predict the outcome.

     

    The weather is going to get pretty mild in the next few weeks before extreme heat sets in; therefore prices above the $4.70 range are not sustainable in the near future. Extreme cold or heat are extremely rare before the month of June.
    18 Apr, 08:01 AM Reply Like
  • papayamon
    , contributor
    Comments (1058) | Send Message
     
    I would agree that May-June should see DGAZ zooming upward. I loaded the boat with 22k shares at 2.82 - at 2.70 I buy 10K more shares, at 2.50 another 10k after that. 40k shares for a 20 cent bounce will put a big smile on my face.
    20 Apr, 03:56 AM Reply Like
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