The price of Nat Gas is very high
The price of Nat Gas is very high…
Nat Gas prices bottomed in April at about 1.90, and seen a big rally since then, Wednesday Nat Gas traded near its highest price of Y 2012.
That action could lead to one of the best Short-selling opportunities of the year
Natural Gas is trading near its 2012 high
The US is sitting on a huge supply of Nat Gas, and all of the US Nat Gas storage facilities are filled to capacity, and Crude Oil producers are just letting thier Nat Gas by-product escape into thin air now.
The US Energy Information Administration reported last week that Nat Gas inventories reached a record-high 3.92 trillion cubic feet. That’s 3% above the record storage amount achieved last December, it is about 7% higher than the 5 yr average storage amount for this time of year.
All that supply should have forced prices lower in here, but Nat Gas is trading at its highest price of the year. Something just doesn’t make sense.
So 1 or 2 things can happen to balance out the pricing.
A brutal winter, consumers could burn up the excess Nat Gas inventory, thus justifying the high prices.
Nat Gas prices could acknowledge the current supply glut, and prices would fall.
The US had far more supply than demand last Winter too. And as seen in the chart above prices dove in response, if there is action like that this year, shorting Nat Gas could be a hugely profitable trade. Stay tuned…
Heffernan Capital Management
Business Development Director – Private Client Group,
3 Raffles Place #07-01
Bharat Building Singapore 048617
Tel: +65 6329 6408
Fax: +65 6329 9699
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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