[e-mail]

Today in Commodities: Dollar in the Driver's Seat

Yes, it seems likely that the next two contract months for UNG will be disappointing, but "all things eventually return to the mean." Natural gas futures will rise -- of course, the only issue is when. At this point with UNG near $11.00, suppose one goes long and it falls to $9.00 within the next few weeks, I suggest that may only be a paper loss of less than 20%, and falling to $9.00 intuitively to me seems unlikely. But, when UNG rises, though probably never getting near its near $65 high of about two years ago, it is not unthinkable that it will provide investors with a very good long-term capital gain from its current level. Yes, I am long UNG and have bought bits and pieces as it has been going down. And yes, I may look up and see the knife falling on me. That's risk/reward.

What Would Happen if the CFTC Limited Energy Speculation?

In comment above, forgot to mention I am long UNG.

What Would Happen if the CFTC Limited Energy Speculation?

The CFTC's possible placing restrictions on energy futures and swaps held by index and exchange traded funds, though perceived by many to be necessary, could be the first step in the eventual breakdown of legitimate future price hedging for all major commodities. In the agricultural sector, for example, this could produce great inefficiencies in the market to the detriment of both producers and consumers. Consider the stark choices that would result, for example, if commodity producers were somehow limited to selling at prices out of the ground. Just a thought.