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

By  +Follow January 13, 2014 8:46AM
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.


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Results for UNG
2 Sep 14 14:00:05
Stock News Updates
2 Sep 14 13:53:30
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Shane Bolling
2 Sep 14 12:55:15
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2 Sep 14 11:20:57
RT @JakeCatskill: .@GeorgeManiereg $UNG down 4.36% today. That's why fracking sand is down? Sounds reasonable. Thanks
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$UNG: United States Natural Gas Fund, Sees Significant Decrease in Short Interest (UNG) http://t.co/dObLLk8I6J http://t.co/prLe9oq4As
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2 Sep 14 09:28:24
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Aswath  Mohan
2 Sep 14 09:13:33
RT @HAInvestor: NatGas Could Hit $6 This Winter $UNG http://t.co/sYFMYxjd8G
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2 Sep 14 08:54:12
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Hard Assets Investor
2 Sep 14 08:53:22
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2 Sep 14 06:10:40
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2 Sep 14 03:11:40
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By  +Follow January 13, 2014 8:46AM



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