Natural Gas ETFs Took A Wild Swing In September

In September, the price of natural gas fluctuated more than we had seen since February of this year and it's likely that while some investors made vast sums of money, others lost just as much, if not more. But what made September so crazy was that natural gas made a significant reversal right in the middle of the month.

The price of the United State Natural Gas ETF (UNG) ended the month of August at $23.95 and closed at $24.83 on the last trading day of September. That move represents a 3.6% increase, not an insignificant amount but also not making anyone piles of money. But, while the price of natural gas started the month at $23.95, its lowest closing price for the month came on September 14, where it bottomed out at $22.69. Had you been watching the price, recognized this was the bottom and bought on September 14 or 15, you could have made yourself a nice 9.4% gain (the gain would be higher if you continued to hold for a few days at the beginning of October).

Again though, a 9% gain is a good return, but not necessarily what I would call “rolling in the dough.”

In order to make that kind of money, you would have had to use leverage. If you had purchased shares of the VelocityShares 3X Long Natural Gas ETN (UGAZ) at the close of September 14 and sold them at the close on September 28, you would have made a sweet profit of 30%. (Again, this would have been even larger, upwards of 50% if you held onto your UGAZ the first few days of October.)

Why did UGAZ perform so much better than UNG? Well, that is because UGAZ is three times leveraged natural gas fund, meaning it gives your three times the return of natural gas if the commodity moves higher. The flip side of that is you can lose three times the amount of money if natural gas prices fall while you hold the shares. Continue reading "Natural Gas ETFs Took A Wild Swing In September"

How To Profit From Natural Gas's Monster Uptrend

By: David Goodboy of StreetAuthority.com

I love finding stealth rallies in the financial markets. These under-the-radar moves higher are ignored by the financial media and therefore by most investors.

Stealth rallies occur for any number of reasons. Primarily, these types of upward moves happen in commodities or stocks that have been beaten down for so long that the public simply loses interest in them.

A stealth rally starts by attracting the attention of only the most die-hard followers. These early investors quietly pocket huge gains while the rest of the investment community is chasing the latest hot stocks or futures.

Right now, a stealth rally is taking place in a commodity that has not been in the headlines for a while. Once a darling of the financial media, this commodity has been beaten down so severely it is rarely mentioned in the daily financial press. After being hailed as the savior of the United States' energy future, this commodity quickly became over-produced. It may have succeeded in revitalizing U.S. energy, but its price continued to plunge lower as the years passed.

In case you haven't guessed it, I am referencing natural gas. The widespread use of fracking created an oversupply of the commodity, resulting in a price plunge.

Recently, however, things have changed. Natural gas is in the middle of a monster upward rally and it's not too late to jump on board.

Allow me to explain. Continue reading "How To Profit From Natural Gas's Monster Uptrend"

Article source: http://www.streetauthority.com/node/30701077

How The Natural Gas Storage Glut Has Been Cut This Summer

Robert Boslego - INO.com Contributor - Energies


The National Oceanic and Atmospheric Administration (NOAA) reports cooling degree day (CDD) data for every seven-day period by state. From that data, they construct a populated-weighted national total.

CDDs are the difference between the daily temperature mean (high temperature plus low temperature divided by two) and 65°F. If the temperature mean is above 65°F, we subtract 65 from the mean.

Example: The high temperature for a particular day was 90°F and the low temperature was 66°F. The temperature mean for that day was: Continue reading "How The Natural Gas Storage Glut Has Been Cut This Summer"

Natural Gas Producers Pressuring Futures Prices Lower

Robert Boslego - INO.com Contributor - Energies


Natural gas futures prices rose by 2.0% last week (ending August 2nd to correspond to the data below) then dropped back to close the week 10 cents lower at $2.77.

NYMEX Nat Gas Futures Nearby Month

Prices rose in advance of the Energy Information Administration’s (EIA) Thursday storage report in anticipation of a draw in inventory, which was confirmed in the data release. As a result, the year-over-year storage glut was cut to 13.4%. Continue reading "Natural Gas Producers Pressuring Futures Prices Lower"

Heat Wave To Cut Natural Gas Storage Glut

Robert Boslego - INO.com Contributor - Energies


The National Oceanic and Atmospheric Administration's (NOAA) Climate Predict Center (CPC) is forecasting a continuation of a major heat wave this week ending July 30th. Nearly every single state is predicted to experience higher than normal temperatures. In some states, such as Washington and Oregon, cooling degree days (CDDs) are forecast to be more than double their normal levels. However, in the two states that burn the most natural gas at power plants, Texas and Florida, the heightened temperatures will be more muted.

Forecast

Based on NOAA's state-by-state cooling degree day forecast, weighted by natural gas-weighted electricity production, I estimate that CDDs will be 30% higher than normal and 12% higher than in the same week last year.

Nat-Gas Use-Weighted Cooling Degree Days Graph (Forecast)

For the year-to-date, cumulative CDDs are 22% higher than normal but the same as than during the year-to-date in 2015. Continue reading "Heat Wave To Cut Natural Gas Storage Glut"