Natural Gas: Timing Is Everything

Those who have been told that oil production is booming may be wondering why the prices of oil and gasoline are climbing again.

Hedge funds raised bets on U.S. natural gas by the most in more than three months as weather forecasts showed a late-January cold spell that will boost demand for the heating fuel. Money managers increased net-long positions, or wagers on rising prices, by 27 percent in the week ended Jan. 15, according to the Commodity Futures Trading Commission’s Jan. 18 Commitments of Traders report. It was the biggest weekly percentage gain since Oct. 2.

By James Roemer:While there are many out there, such as T. Boone Pickens, trying to push the use of natural gas, one of the warmest winters on record continues to pressure natural gas prices to multi-seasonal lows. True, natural gas is now cheaper than coal and industrial demand is picking up, but over the next 2 weeks or so, some of the warmest weather we have ever seen in March, will blanket much of the Midwest and Eastern U.S.

James Cordier submits:For anyone who hasn’t noticed yet, it’s July. Soon to be August. To Natural Gas traders, that means one thing: Hurricane Season. Here in Florida, the local media is already getting geared up for the annual gala.

By Hard Assets Investor: By Sumit Roy Natural gas rose to near $4.40/mmbtu today after the Energy Information Administration reported that operators injected 31 billion cubic feet into storage last week, below the 33 to 38 bcf build most analysts were expecting. The injection was above last year's build of 23 bcf, but below the five-year average build of 41 bcf.

Canadian oil and gas prices are in the midst of a nice rebound after trading at some of their lowest levels for much of the past year. Canadian benchmark natural gas prices shot up to $3.47 per gigajoule,, according to energy data provider NGX. The last time prices traced that level was 16 months ago, on November 2011. Canadian producers have been aggressively cutting natural gas production since prices touched a decade low last year, but are rebounding on cooler weather and lower inventories.

By HiddenValueInvestor:Natural gas prices are often whipsawed in the few minutes after the EIA Weekly Natural Gas Storage Report is released based on whether or not the storage numbers beat or missed the current analyst estimates. But after a few minutes of trading it becomes more important whether or not the storage figures beat the year over year comparison and the all important 5 year average.