Natural Gas

[winston]

Natural gas today was up almost 6% to a six-month high

The U.S. Energy Information Administration said in its weekly report that natural gas storage rose less than what analysts had forecast. But that was just an extra kick for a market that has been moving aggressively higher in the past NINE days--up 37%.

Now, we should note, nat gas is a market that has some incredible swings. Over the past three years it has traded as high as $6.50 and as low as $1.64.

For perspective on the wild swings, take a look at this long-term chart:

chart
You can see we're coming off of a very low base. And the moves in this commodity can be dramatic.

Three months ago natural gas was continuing to slide, even as oil was staging a big bounce. But natural gas has now bounced 58% after sniffing around near the all-time lows. Meanwhile, oil has doubled.

Based on the backdrop for oil, broader commodities and the economy we’ve been discussing, and acknowledging the history of natural gas prices, we could be looking at the early stages of a big run in nat gas prices.

Summer is one of the most volatile periods for natural gas with the combination of heat waves, hurricanes and potential weather pattern shifts such as La Nina.

During the summer months, a 50% move in the price of natural gas is not uncommon. Another 50% rise by the end of the summer would put it around $4. And four bucks is near the midpoint of the $6.50-$1.65 range of the past three years.

Billionaire investor David Einhorn has also perked up to the bull scenario in nat gas. In his most recent investor letter his big macro trade this year is long natural gas.

Here's what he had to say: "Natural gas prices are not high enough to justify drilling in all but the very best locations. The industry has responded by dramatically reducing drilling activity.

As existing wells deplete, supplies should fall. The high cost of liquefying and transporting natural gas limits competition to North American sources. Current inventories are high following a period of over-drilling and a record warm winter.

However, the excess inventory is only a couple percent of annual production, which has already begun to decline. Normal weather combined with lower production could lead to a shortage within a year.”

This all contributes to the bullish action we're seeing across commodities, led by the bounceback in oil. The surviving companies of the energy price bust have been staging big comebacks, but could have a lot further to go on a run up in nat gas prices.

Source: Forbes

[winston]

It's Time to Buy Natural Gas

By Matt Badiali

Oil production is falling... and it's taking natural gas production with it.

Back in the early 2000s, "fracking" technology was first developed to target natural gas. The technology cracked open shale formations to liberate natural gas. After so much natural gas came online, prices plummeted in 2009... And fracking companies shifted their focus to oil.

But like all commodities, natural gas prices are cyclical. And after being ignored for years, they're quietly ticking higher today. As I'll explain, that gives us a great investment opportunity...

You can see in the chart below that the fracking transition from natural gas to oil was successful...

Please Enable Images to See this

The shale revolution first started in the early 2000s, pushing natural gas production to new highs. As a result, natural gas prices tanked. Explorers lost interest in natural gas because prices were too low.

However, oil prices stayed high. Shale explorers like Chesapeake Energy (CHK) switched from gas shales like the Haynesville and Fayetteville shales to oilier ones, like the Permian Basin. But oil shale wells still produce natural gas. And the industry drilled a huge number of shale wells, so natural gas production continued to climb.

Fast-forward to today, and we have more natural gas for sale than we have ever had in the history of the U.S., almost completely due to oil production. As regular Growth Stock Wire readers know, oil prices fell, killing the industry.

Nearly 70 companies have gone bankrupt since the start of 2015. Billions of investment dollars evaporated as these stocks went to zero. So companies stopped drilling wells... And U.S. production is falling.

The majority of the decline in production comes from Texas, which is the largest state producer of natural gas. Production in the Marcellus shale (which stretches through Ohio, Pennsylvania, and West Virginia) is also declining.

Unlike oil, natural gas prices are set locally. That means the supply and demand of natural gas here in the U.S. directly affects the price. Falling production has already started to boost prices. You can see the ebb and flow of both production and prices in the following chart...

Please Enable Images to See this

Due to the tremendous glut in natural gas supply, prices fell to just $1.49 per thousand cubic feet (Mcf) in March. Today, natural gas is trading around $2.29 per MCF – a 54% increase in just three months.

That's a strong rally... and I expect it to continue as production continues to fall. As you would imagine, rising natural gas prices have sent shares of natural gas producers soaring.

Companies like Range Resources (RRC), San Juan Basin Royalty Trust (SJT), Cabot Oil & Gas (COG), and EQT (EQT) are up 119%, 77%, 63%, and 51%, respectively, from their January lows. It looks like the bull market we're starting to see in oil is extending to natural gas companies, too.

It's time to jump into this rally if you haven't already.

Source: S&A Resource Report

[winston]

Natural gas on the move... sector fund UNG jumps 35% since early March.

[winston]

We’re Bullish on This Commodity

By Matt Badiali

Natural gas has a bright future.

That’s my biggest takeaway from the U.S. Energy Information Administration’s (EIA) annual Energy Conference. The event wrapped up Tuesday at the Washington Hilton in D.C.

Source: The S&A Resource Report

http://dailytradealert.com/2016/07/14/w ... commodity/

[winston]

Will Natural Gas Perform Like Oil? (UNG, XLE)

By Gary Ashton

The Bottom Line

Natural gas prices are currently lagging behind oil prices YTD.

Oil prices are being driven higher by speculation that OPEC will reach some kind of output freeze agreement on the side lines of an energy conference in September.

In the meantime, Fitch has said in a note to clients that natural gas prices could take longer to show any meaningful recovery.

Yet the market is relatively positive on the future prospects for the sector, as reflected in the out-performance of some companies’ share price in 2016.

Source: The Trading Report

http://www.thetradingreport.com/2016/08 ... l-ung-xle/

[winston]

Natural gas moves higher… sector fund UNG jumps 10%-plus in the past month.

[winston]

Natural Gas Could Be Explosive

By Eric Fry

After topping out at $13.69 per million British thermal units (MMBtu) in 2008, the price of natural gas ratcheted down to ever-lower lows… until it hit a low of $1.61 per MMBtu last March

At the current natural gas price of $2.90 per MMBtu, the majority of oil and gas companies lose money pulling the stuff out of the ground. Obviously, that’s a tough way to make money.

So most companies have placed their exploration programs in mothballs. This sectorwide inactivity is why the number of natural gas drill rigs in operation has plummeted from a 2008 high of 1,606 to a recent low of just 81.

Already, the price of natural gas has soared 80% from the extreme lows it hit six months ago. But this bounce is probably just a taste of much larger gains to come.

Longer term, demand for natural gas is on track to rise as the U.S. power grid shifts away from coal-fired electricity generation

One way to speculate on natural gas would be to buy the United States Natural Gas Fund (NYSE: UNG; Price: $8.53) – an ETF that tracks the price of natural gas.

Another way to bet on natural gas would be to buy shares of the First Trust ISE-Revere Natural Gas ETF (NYSE: FCG; Price: $25.31). This ETF holds a portfolio of North American gas stocks like Encana Corp. (NYSE: ECA), Anadarko Petroleum (NYSE: APC) and Devon Energy (NYSE: DVN). It also pays a 2.74% dividend.

Source: The Non-Dollar Report

http://nondollarreport.com/2016/09/natu ... ?src=email

[winston]

This stealthy bull-market has huge upside today

Source: Daily Crux

http://thecrux.com/this-stealthy-bull-m ... ide-today/

[winston]

Natural Gas Rallies to 20-Month High on Shrinking Surplus

by Nilanjan Choudhury

The unseasonably warm weather helped natural gas pop through the $3 barrier for the first time in more than a year.

Coupled with the easing production from the major shale plays, natural gas prices are set to rise further.

What’s more, rig count has been falling consistently and is now languishing at 89 – compared to almost 200 a year ago and the high of 1,606 reached in 2008. Therefore, production growth is unlikely to resume anytime soon.

Source: Zacks

http://finance.yahoo.com/news/natural-g ... 06388.html

[winston]

Winter is coming—so I’m buying nat gas: Technical analyst

by Heidi Chung

As winter approaches, one trader thinks natural gas is headed toward a "potential technical breakout."

Shares of UNG (NYSE Arca: UNG), the ETF that tracks natural gas for short periods of time, is trading near $8.60 range during Friday's session, and has not broken above $9 since January. But Todd Gordon of TradingAnalysis.com thinks that's about to change.

"UNG is bumping up against the $9 region, threatening a breakout ... we should be able to move higher into this winter season," Gordon said Friday on CNBC's " Trading Nation ."

Meanwhile, if UNG falls back below $8, he plans to "cut the trade and control losses."

Investors should note that while UNG has a high correlation to the daily moves of natural gas futures, the costs of "rolling" from one futures contract to the next exact a serious toll on long-term holders of the ETF.

For instance, while continually rolled natural gas futures (the most commonly viewed chart) are up 14 percent over the past year, the UNG is down 29 percent.

Source: CNBC

http://finance.yahoo.com/news/winter-co ... 57267.html