We will see $5 Natural Gas this season and possibly much higher
This is a commodity that can soar if storage is not adequate. With the weather and the increase in apparent demand the current production doesn't really matter, storage level dictate how high the price will go. Keep in mind, the bulk of the degree days lie ahead as Winter has just started. Unfortunately, this has not reacted much yet like other Trusts. If you want to play Natural Gas, Mesa R/T has the most leverage to Gas and can make some astounding moves if gas continues higher. Another is Cross Timbers, but right now Mesa is incredibly cheap because tax loss selling hit it hard earlier this month.
SJT also pretty much a pure play on NG prices, also HGT however there are issues there.
I don't dispute that NG could reach $5 if cold weather continues through January (don't agree with 'much higher' except in local spot prices like New York gate). But I still say it's temporary and will be reversed by spring.
Since we don't know how cold it will be, it is just conjecture at this point whether we get materially over $5. However, it is entirely possible we get to $6 or higher if storage draws down to a level below the 5 year range lower threshold and remains there within the withdrawal season. This is a commodity where price is meaningless if storage is deemed inadequate. Of course things can be done to throttle demand such as industrial interruptions. Right now the weather outlook from now thru the first decade of January is looking very bullish according to the private weather forecasts I follow. Mesa Royalty Trust remains my favorite for playing the gas price because of its size and healthy payout tied to heavy weighting to gas. San Juan Basin basis prices are firm as well because gas supply in the West has not grown as much as Eastern. SJT and HGT(has issues) are fine but, in my opinion, they won't see the degree of price response you can get with Mesa. I believe NDRO will eventually catch a bid as well since it is looking to me that Gas will settle out into a higher trading range this next storage season.