Winter weather outlook gives natural gas bulls reason for hope
Seeking Alpha
Published Oct 11, 2017 05:25PM ET
Winter weather outlook gives natural gas bulls reason for hope
- The last two winters have been unusually warm, sapping demand for the natural gas that heats roughly half of U.S. homes, but the U.S. Energy Information is forecasting more typical winter weather this year and that Henry Hub spot prices will rise 5% Y/Y to average $3.18/MMBtu this winter.
- Even a normal winter could mean big price swings since supplies are relatively tight; the glut of natural gas in storage has shrunk, and the EIA expects the U.S. to enter the winter heating season with inventories at ~3.8T cf gas, 1% lower than the five year average.
- “The market seems positioned for meaningful upside barring a third consecutive record warm winter,” says Zane Curry at Mobius Risk Group. "Demand is robust and here to stay."
- ETFs: UNG, UGAZ, DGAZ, BOIL, GAZ, KOLD, UNL, UHN, DCNG, GAZB
- Now read: Physical Balance Tightening Offsetting Bearish Weather Forecasts For The End Of October
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