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

By  +Follow January 13, 2014 8:46AM
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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.


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Results for UNG
Patrick
2 Sep 14 14:00:05
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Stock News Updates
2 Sep 14 13:53:30
$UNG: [video] Fracking vs. farming http://t.co/VDAAfaFak9 http://t.co/xb96W7Fdwq
Top ETF Funds
2 Sep 14 13:28:23
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Patrick
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R
2 Sep 14 12:56:55
Commented on StockTwits: Hi, I see 3.73 as a support at $NGAS not resistance,and a Gap to fill in $UNG @ 19.95 /... http://t.co/2g9mlvO4RK
Shane Bolling
2 Sep 14 12:55:15
@twistedmarkets $UNG -2% tempting, like to see Oct #NatGas $3.70-.75 b4 going L myself.
MarketCurrents
2 Sep 14 12:25:12
Energy names lead Dow lower as oil tumbles http://t.co/Tx1yfINRpp $XLE $USO $UNG $DIA
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2 Sep 14 12:06:28
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Stock News Guru
2 Sep 14 11:53:20
$UNG: [video] Taking fuel taxes from Feds http://t.co/CIP2CYJaF4 http://t.co/wptJIrllwC
Jake Catskill
2 Sep 14 11:51:29
RT @BloombergNews NEWS FLASH: PG&E should pay $1.4 billion for 2010 San Bruno natural gas explosion, judges say: http://t.co/Al0U8EWhQw $UNG
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2 Sep 14 11:34:01
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2 Sep 14 11:32:53
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George Maniere
2 Sep 14 11:20:57
RT @JakeCatskill: .@GeorgeManiereg $UNG down 4.36% today. That's why fracking sand is down? Sounds reasonable. Thanks
Jake Catskill
2 Sep 14 11:19:58
.@GeorgeManiereg $UNG down 4.36% today.
Extreme Stocks
2 Sep 14 11:09:20
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Patrick
2 Sep 14 11:00:05
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R
2 Sep 14 10:36:24
$UNG $DGAZ $UGAS Natural gas falls on forecasts for falling U.S. temperatures http://t.co/mCvzgq9I8t
lookn4wins
2 Sep 14 10:03:06
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2 Sep 14 10:00:05
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Stock Headlines
2 Sep 14 09:53:24
$UNG: United States Natural Gas Fund, Sees Significant Decrease in Short Interest (UNG) http://t.co/dObLLk8I6J http://t.co/prLe9oq4As
Market Int Center
2 Sep 14 09:28:24
Potential US Natural Gas $UNG Trade Has 7.82% Downside Protection ( http://t.co/6MTm858y8x )
Aswath  Mohan
2 Sep 14 09:13:33
RT @HAInvestor: NatGas Could Hit $6 This Winter $UNG http://t.co/sYFMYxjd8G
Patrick
2 Sep 14 09:00:05
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David Tuzzolino
2 Sep 14 08:54:12
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Hard Assets Investor
2 Sep 14 08:53:22
NatGas Could Hit $6 This Winter $UNG http://t.co/sYFMYxjd8G
Investors Hangout
2 Sep 14 08:48:30
clayton: $UNG 22.26 http://t.co/mZUu5wJe9m
Investors Hangout
2 Sep 14 08:48:27
clayton: $UNG 22.26 http://t.co/LLLKtdgZDS
clayton
2 Sep 14 08:43:22
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lookn4wins
2 Sep 14 08:36:02
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Stocks in News
2 Sep 14 07:53:14
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2 Sep 14 07:45:00
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2 Sep 14 07:44:48
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2 Sep 14 07:31:17
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chartguy89
2 Sep 14 07:30:00
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2 Sep 14 07:27:18
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2 Sep 14 06:56:00
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See It Market
2 Sep 14 06:21:01
RT @andrewnyquist: Solid research by @InterestRateArb: "Commodities Focus: The COT Report & Seasonality Trends" http://t.co/DHPSbm5WCd $SPY…
Jordan Black
2 Sep 14 06:10:40
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Hard Assets Investor
2 Sep 14 05:58:20
HAI Video: Energy Trader Says NatGas Could Hit $6 This Winter $UNG http://t.co/sYFMYxjd8G
IH NASDAQ OMX
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2 Sep 14 04:53:08
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2 Sep 14 03:51:40
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gordon gekko is god
2 Sep 14 03:11:40
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Brent Ditto
2 Sep 14 02:28:45
RT @SeekingAlpha: Natural Gas: Poised To Go Higher http://t.co/6wJYUNjV7A $BOIL $GASL $UNG
K9Trader
2 Sep 14 02:04:05
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By  +Follow January 13, 2014 8:46AM
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