Natural Gas Futures Soar to Four-Week High on Temperature Outlook

Natural Gas futures have done a complete “about-face” from last week’s contract low ($3.625 per 1,000ft3 of Btu’s) to prices not seen since the first trading day of last month. Natural gas futures are responding to meteorologists predictions that “below-normal” temperatures this winter season incite demand for the efficient heating fuel (starting this month!).

To make this situation more interesting, natural gas stockpiles are reportedly 7.8% less than near this same time last year, which is the biggest deficit for this time of year since 2005. Temperatures in the eastern-part of the US are expected to be colder than normal starting next week on the 9th and continue through November 18th.

Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his insight regarding the current natural gas futures situation by stating today, Cold weather in the Eastern part of the country, while natural gas stockpiles are falling, have pushed natural gas futures to a new monthly high.” Brady added, If the cold weather in the East continues we could see natural gas futures continue to rise.”

The trend for natural gas futures is now up as of today (in my view). On the opening bell yesterday, natural gas futures gap-open higher and hasn’t looked back. I would await a pull-back in natural gas futures before jumping on-board this train.

ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.