What are your expectations on nat gas for the rest of the year? I'm thinking of staying long and i don't like rolling positions in the futures because of the premium, so what i'm doing is buying UNG calls from april '09 out to jan '10. I figure this ETF represents the spot month nat gas. Any advice from here?
here's a pretty good thread with real traders http://elitetrader.com/vb/showthread.php?threadid=155396 Don't forget to rate it at the bottom of the page.
How about KOL (Coal ETF) and UNG? Nothing changes, we will be using NG and Coal for the next 25 years.
I was having this discussion with a friend of mine who is also in the electricity industry. Nat Gas is so cheap right now that running an efficient Combined Cycle Gas Power Plant is as cheap as a coal one. And being that this is the time of year where all the large Nuclear and Coal burning power plants take advantage of the more mild temperatures and come offline for maintenance outages, gas plants are running to support the grid. In order to keep the lights on many many gas fired power plants are running at all times of the day. Not only are the more efficient gas power plants running all day and all night but the less efficient units that dont commonly run are being called on to help keep the lights on. That is where I came to wonder, how is it with the absolutely staggering amount of gas that must be getting burned on a daily basis has this commodity continued to slide further and further towards $3 mmbtu? It just seems so odd to me, can anyone shed light on this topic for me?
The natural gas in storage is way up and with industrial demand down we should have historically high levels in storage at the end of injection season, which is just starting. The only way NG goes up IMO is if oil drags it up. Traders will pop the price along the way, but NG is just for trading at this point. UNG loses a lot of value over time because of the expenses related to futures. IMO there are better places to trade if holding for any period of time. Check out the storage report. http://www.eia.doe.gov/oil_gas/natural_gas/ngs/ngs.html
You obviously don't know how much industrial gas consumption has tanked since the economy came to a crawl. Also, we are in the shoulder months for gas usage with heating load very small and none being used for a/c. And as the other poster stated the new finds of shale gas greatly increased production although some wells have been shut in because of price. Price tells you all you need to know.
LOL I got nailed on that number this morning at 9:30, lost about 9k-10k. Natty gas sucks, I hate these dumb commodities not bouncing. This price is way too low for natty.