Oil prices have gotten much of the attention lately among commodity traders following news of the first OPEC production cut since 2008. However, while WTI crude prices are up 3.6 percent in the past month, Henry Hub natural gas prices have skyrocketed 34.5 percent.
Not surprisingly, the United States Natural Gas Fund, LP UNG 0.53% is up 23.2 percent and the VelocityShares 3X Long Natural Gas ETN linked to the S&P GSCI Natural Gas Index Excess Return UGAZ 2.07% is up 75.9 percent in that time.
The VelocityShares 3x Inverse Natural Gas ETN linked to the S&P GSCI Natural Gas Index Excess Return DGAZ 2.3% is down 51.2 percent.
Why is gas so hot? The air is getting cooler.
Consensus extended winter weather forecasts for North America have shaved off a few degrees in recent weeks, suggesting strong gas demand this winter. Expectations for gas demand have taken a sharp 180-degree turn of late. Fall in the U.S. was seasonably warm, but meteorologists are now anticipating a colder winter, which is bullish news for gas investors.
“Warm temperatures and high pressure over northern Canada in the polar stratosphere is reflected in the troposphere with ridging/positive geopotential height anomalies,” a new Atmospheric and Environmental Research report reads.
“This is forcing…
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