logo
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Polar Vortex Drives Up Gas Prices, Iranian Deal Drives Down Crude

By  +Follow January 13, 2014 8:46AM
Share:
Tickers Mentioned:

ETFs tracking natural gas prices spiked Monday, following natural gas futures north as speculation that Thursday’s report on stockpiles from the Energy Department will show steep declines. Natural gas futures for Feb. 14 delivery were up over 4.75 percent Monday.

Gains for natural gas futures pulled up the major ETFs tracking natural gas prices, as well as companies extracting it. The United States Natural Gas Fund (UNG) jumped by more than 4.75 percent, the iPath Dow Jones UBS Natural Gas Subindex Total Return ETN (GAZ) climbed over 6.25 percent, and the United States 12-Month Natural Gas Fund (UNL) is up almost 3.5 percent.

Polar Vortex, Cold Weather Could be Spurring Demand

The winds that swept down from the north bringing sub-zero temperatures to most of the United States this last week also brought with them the chance that natural gas usage would increase dramatically. And, with MDA Weather Services predicting persistently lower-than-average temperatures, speculation appears to be raging among traders that the US Energy Department will report dramatically lower reserves on Thursday, driving up prices for natural gas.

“Traders are focusing on the fact that we’re probably going to see a record storage withdrawal,” said FCStong Latin America’s senior vice president of energy trading Tom Saal. “The market’s not ready to give up on winter yet.”

Thursday’s report is widely expected to show reserves dropping by more than 300 billion cubic feet in the week ending Jan. 10, a figure that would exceed the previous record decline of 285 billion cubic feet from Dec. 13.

Crude Oil Prices Continue to Plunge

News of this weekend’s deal with Iran that could return some of that country’s vast oil reserves to the open market pushed crude prices even lower on Monday, moving against natural gas’ big gains. West Texas Intermediate (WTI) crude was down almost 1 percent, below $92 a barrel, while Brent Crude was off over 0.25 percent to just under $107 a barrel.

"Up to 1 million barrels of Iranian oil per day could become available," said Commerzbank analysts. "Unless oil production was cut elsewhere, this would give rise to a considerable oversupply on the oil market, which would weigh on prices."

WTI reached a six-month low, continuing a decline of over 8 percent since it peaked at just over $100 a barrel in late December and pulling down ETFs connected to crude prices with it. The United States Oil Fund ($USO) was off almost 1.25 percent, the PowerShares DB Oil Fund ($DBO) fell just over 1 percent, and the United States 12-Month Oil Fund (USL) fell almost 0.75 percent.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

				
				
By  +Follow January 13, 2014 8:46AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.