Fossil Fuels in Focus as Hurricane Season Begins
U.S. hurricane season kicked off over the weekend, as the time period between June 1st and November 30th of each year brings special attention to these storms. Aside from the devastation they can bring to the areas they hit, these storms can also have a big impact on the commodity world (albeit short-term). Few commodities feel the brunt of the blow more than fossil fuels [for more commodity news and analysis subscribe to our free newsletter].
Natural Gas: Is Now The Time To Make A Play?
Natural gas is one of the most popular commodities in the world and it often ranks among the CME Group’s most traded futures contracts; however, the commodity had been stuck in a rut since the 2008 recession before it finally saw some relief as 2013 opened. From natural gas’s peak to the beginning of the year, the fossil fuel had declined by more than 92%, as a number of macroeconomic factors weighed on the commodity. Just as it finally picked up steam in 2013, NG sputtered into May, dipping more than 9% through the first week of the month [for more natural gas news and analysis subscribe to our free newsletter].
Natural Gas as Volatile as Ever
After being declared one of the worst investments of the last few years, natural gas seemed to finally find its footing in 2012. The fossil fuel surged through the end of summer, marking a 70% jump in just a few short months, only to watch its price cool back down during August. From there, it has been nothing short of a roller coaster ride for this asset and its traders, as NG has been all over the place in the last two months [for more natural gas news and analysis subscribe to our free newsletter].
Natural Gas, UNG Slaughtered by EU Sanctions
Natural gas took a major blow in trading today as the fossil fuel lobbed off more than 3.5%. The unexpected drop came as new sanctions from the EU officially banned natural gas imports from Iran. The move comes as European nations are “trying to increase pressure on Iran to cooperate in talks regarding its nuclear program” writes Associated Press. This comes in a long line of efforts by numerous nations to force Iran into cooperation regarding its nuclear program, an issue that the country seems to have no intentions of addressing [for more natural gas news and analysis subscribe to our free newsletter].
Will Hurricane Isaac Send UNG Soaring?
As hurricane Isaac has continued to develop, it appears that it now has a clear path set to run through the Gulf and make landfall within the next 24 hours. Though it steered clear of the Republican National Convention, the storm has now entered the Gulf area and could cause a lot of problems for the dozens of drilling rigs in the surrounding area. Not only that, but the storm is currently headed along a very similar path to 2005′s Hurricane Katrina, worrying residents and government officials. Three states have already declared an emergency and have begun to evacuate residents.
Natural Gas, UNG On a 70% Rally
Natural gas has been one of the most talked about commodities this year, as its prices tumbled at the start of 2012. Up until a few months ago, NG had been one of the worst performing commodities over the past few years, as the recession started the fossil fuel on a slippery slope that it would never fully recover from [see also 25 Ways To Invest In Natural Gas].
Commodity Trading Trends: When To Stop Shorting Natural Gas
As natural gas has continued its massive decline, a number of investors (myself included) have hopped into short positions, allowing most to receive handsome profits in recent weeks. NG futures have been under a fair amount of pressure as this past winter was extremely mild curtailing demand for this commodity. Adding to that, new advancements in fracking have led to even greater supply, depressing prices to levels that none could have predicted. But while a short position in this commodity has yielded strong results, its outlook is beginning to turn sour, as a seasonal trend is threatening natural gas [see also Why You Should Invest In Natural Gas: The Fuel of the Future].
