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  • bakedinalready bakedinalready Jan 28, 2013 3:49 PM Flag

    Natural gas prices plunge as forecasts finally agree on warming trend

    Natural gas futures plummeted on Monday after weather services began forecasting a warming trend to settle in over the central and eastern swathes of the U.S.

    On the New York Mercantile Exchange, natural gas futures for delivery in March traded at USD3.314 per million British thermal units, down 4.29%.

    The commodity hit a session low of USD3.305 and a high of USD3.414.

    Colder temperatures gripping the central and eastern U.S. should thaw soon.

    Updated weather forecast models released earlier pointed to milder temperatures setting in for mid-February, giving the U.S. Midwest and Northeast a break from recent blast of cold air.

    The Commodity Weather Group predicted above-normal temperatures in the eastern half of the U.S. from Feb. 7 through Feb. 11.

    Natural gas futures are very sensitive to weather reports in the U.S. winter.

    The U.S. heating season running from November through March sees peak demand for gas.

    About half of U.S. households use gas for heating purposes, according to Energy Department data.

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    • Baked, I see that NG has come in line with what it should be, finally... but the storage report this week is supposed to show a draw over over 200, which leads me to believe that DGAZ is topped out for the time being, and we should see a slight pop on the cold weather for 2 weeks and the storage report. I am strongly considering buying a small lot of UGAZ right now. thoughts. ?

      • 1 Reply to johnson4730
      • I was going to post that this morning but got involved with other stuff. It did have a slight pop today (UGAZ), but they sold right into it. You could try to play long for a short term pop, but, winter is mostly behind us, and February is predicted to be warm for first two weeks, so that leaves a very small window of opportunity. Traders may be looking forward to end of winter and lower prices. I don't think I would buy it here. You missed your chance this morning, but you would have had to be pretty nimble. Instead, I would wait, and if there is a pop, sell into it, as we know prices will fall into March. They seem to be selling any pop, as I would. If UGAZ goes below 17 in the next week or two, you might have a play there for a week or so. Storage report is not nearly as important as weather. I am looking for UGAZ to hit 15 or less in March, so am looking to short any price rise.

    • UGAZ should see $15 by March, perhaps single digits. Still a lot of money to be made there.

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