Because Nat Gas is a local commodity, Crude oil is a global one. On paper, If you are a Oman Crude oil producer and the USD devalue against your currency you will ask for more dollars for your product, you don't have that problem with Natgas.
Nat Spreads
- Thread starter PAPA ROACH
- Start date
Because Nat Gas is a local commodity, Crude oil is a global one. On paper, If you are a Oman Crude oil producer and the USD devalue against your currency you will ask for more dollars for your product, you don't have that problem with Natgas.
Nat Gas has been such a dog, and I don't see it getting any better any time soon. Look at the sell-off in the Sept-Oct calendar spread the past several days. Yeesh. Forecasts for record supplies this winter and a very cool summer (electricity peaking units) means every commercial long strips or inventory will continue with the dump mode.
In terms of correlations, look at WTI and the Canadian dollar vs. the U.S. dollar.
While crude is an an excellent flight-to-quality instrument for geopolitical events, it's very high correlation to the equity markets for the time being makes it a much weaker inflationary hedge than precious metals.
In terms of correlations, look at WTI and the Canadian dollar vs. the U.S. dollar.
While crude is an an excellent flight-to-quality instrument for geopolitical events, it's very high correlation to the equity markets for the time being makes it a much weaker inflationary hedge than precious metals.
Near term contracts are getting slammed but apparently a hedge fund is betting big on the winter contracts.
http://www.ft.com/cms/s/0/e8a82d0e-8cee-11de-a540-00144feabdc0.html?nclick_check=1
http://www.ft.com/cms/s/0/e8a82d0e-8cee-11de-a540-00144feabdc0.html?nclick_check=1
Not that im 100% certain, but a friend of mine were discussing this article, and then a broker friend of his told him that they were actually covering a short position that the cftc told them was too large. right around the same time supposedly a 900k share short order of UNG came in. take that for what its worth.
Nat Gas now at $2.75/mmbtu I think we will hit low of ~$2.00/mmbtu. Demand is heading back down after power gen summer demand drops. Watch the storage injection numbers jump in the coming weeks...storage will be near full this October. I expect operational flow orders to be instituted by pipelines to leave a little storage headroom for operational reasons.
Fundamentally/dynamically correct.