Inventory Glut Has Natural Gas Traders in Weather Business (UNG)
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Energy markets are quite on Thursday, one day after violent moves following election results. Throughout the campaign, U.S. Energy was a key talking point for both candidates, with Romney touting coal and Obama continuing his support for clean energy.
Interestingly, both industries have been gunned-down by the rise of cheap natural gas. This week, former GE Chairman Jack Welch told CNBC he thinks natural gas is like the Internet in the 1990, referring to its potential to reshape today's energy landscape. While this may be true longer term, in the short term traders are focused on weekly supply-demand fluctuations.
According to a widely followed report out today, natural gas stock piles rose by 21 bcf, slightly less than estimates of 26 bcf. Total inventory sits at record levels for this time of year, and this has buy-side investors glued to weather forecasts, as moderation in temperatures could lead to increased surplus. For the record, on Wednesday the National Weather Service 6 to 10 day outlook called for above normal temperatures in the east and below normal temps in the west.
United States Natural Gas (NYSE: UNG) is trading higher by 0.3 percent intraday on Wednesday.
UNG has declined by 19 percent year-to-date.
Interestingly, both industries have been gunned-down by the rise of cheap natural gas. This week, former GE Chairman Jack Welch told CNBC he thinks natural gas is like the Internet in the 1990, referring to its potential to reshape today's energy landscape. While this may be true longer term, in the short term traders are focused on weekly supply-demand fluctuations.
According to a widely followed report out today, natural gas stock piles rose by 21 bcf, slightly less than estimates of 26 bcf. Total inventory sits at record levels for this time of year, and this has buy-side investors glued to weather forecasts, as moderation in temperatures could lead to increased surplus. For the record, on Wednesday the National Weather Service 6 to 10 day outlook called for above normal temperatures in the east and below normal temps in the west.
United States Natural Gas (NYSE: UNG) is trading higher by 0.3 percent intraday on Wednesday.
UNG has declined by 19 percent year-to-date.
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