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Gas (natural)

edited November 2018 in Off-Topic
(Title edited for clarification 11/15)

I’ve watched nat gas prices diligently over the past 3 years and have been absolutely amazed by how stubbornly the price stuck at the $2.80 - $3.00 price level. Damnest thing that it never budged much above $3 over that extended period. Couldn’t seem to get out of its own way. And than this month the price suddenly exploded. Double-digit gains yesterday. Followed by an insane 20% gain today to close at near $5.00.

The Chicago Tribune article I’m linking points the blame to fears of cold weather. But - Come-on folks. Fears of cold weather surface every fall without gas prices spiking 50% in a few weeks. What I’m wondering is whether nat gas is perhaps used in the storing of soy beans?

@Ted recently commented: “@MFO Members: Sold beans @$8.81a bushel, last year they sold at $10.20. Unlike corn soybeans don't store well, they must be kept very dry or they will rot. Some nearby Iowa soybean farmer's are taking on the additional cost of storing them in hope of a better price if the Trump China riff blows over. I don't think that going to happen.”

That’s the only game-changer I can think of that might have driven the price of gas up so rapidly. I’m not invested in gas. My PRAFX probably holds a bit. The fund stood up pretty well today, loosing only a penny. We heat with LP gas (liquified petroleum) as natural gas service isn’t available in our area. LP tends to track more closely to crude prices. But I’m afraid many may be looking at near double the cost of home heating this winter than what they’ve become accustomed to.


Chicago Tribune on today’s gas price burp :

Article on soy bean storage :


  • Here’s another thought =

    “Commodity experts are speculating that at least part of the catalyst for the rally in natural gas to its highest level in about four years is a cold snap in the East Coast, with the move higher amplified by a paired bet by speculators who simultaneously went long oil futures, betting on a crude price rise, while shorting natural gas, or betting that prices of the fuel would fall.

    However, the exact opposite has played out. U.S. crude oil CLZ8, -0.21% shed a quarter of its value over the past six weeks, a decline that matches the traditional definition of a bear market. As a result, market participants belief, a number of traders were forced to unwind their wrongway bets which has helped to exacerbate the surge in natural gas and the fall in oil.”

    If this Marketwatch article is right, I would assume the move is temporary.
  • Nat gas stock have been in a brutal bear market for years. When I noticed FCG DOWN yesterday even after the huge run up in gas itself I took a position in FCG. This thing will turn around, even coal had it's day post-Trump.
  • Don't bet the farm, eh? If you're a proven day trader, you may go play against the others and the "machines".
    I've followed both FCG and UNG for about 10 years. Almost bit on a price bump in January, 2012........nothing much happened, at least not to a hold of more than a few months.
    In the below 11+ year chart, I traveled the chart through this period using a 1 year time period. One of the largest "gaps" in pricing between these 2 choices was from March 2009-March 2010.........FCG = +71% and UNG = -51%.
    One will see with the chart, that these two investments began to travel different paths after 2008. No, I don't know why.

    FCG and UNG chart, May 2007 to date

    Well, just a blip of an input to this thread. We're having enough head scratching with our beloved tech. and healthcare equities, although still ahead of most other equity sectors.
    Take care,
  • @MFO Members: $2.89 where I live. Type in your zip code for the price in your area.
  • edited November 2018
    Members: A gallon of gas is selling for $2.45 near my home in Charlotte, NC and $2.24 near my coastal home in Murrells Inlet, SC. This is due in part that the state gas tax is higher in NC than SC along with gas in the big cities trends to sell for more than the outlining areas.
  • Uhhhhhhhhh !!!
    The thread is the natural gas type.....
    @hank title name change again, eh?
  • edited November 2018
    It’s interesting that Bloomberg TV didn’t start promoting the NG story until today - after the two more noteworthy days. They’re a day late to the party, as NG is currently down nearly 15%. (I’ll never understand commodities.)

    Another story Bloomberg decided to highlight today is the huge volume of stored soybeans piling up in midwestern states. Of course, @Ted mentioned that one here two days ago. So always remember that with investment news, You heard it here first.

    Regarding the 25% two-day runnup in NG, followed by today’s 15% downdraft, I’m reminded of the late Lewis Rukeyser’s “Hair today. Gone tomorrow.” quip. Some of the over-50 crowd may still remember the silver haired sage. Complete quotation follows, along with the source.

    Answering a viewer's letter on investing in a hairpiece manufacturer, (Rukeyser) said, "If all your money seems to be hair today and gone tomorrow, we'll try to make it grow by giving you the bald facts on how to get your investments toupee."

  • @hank
    Without searching for a video clip..........can still hear his unique voice and enunciation. I always enjoyed the "intro", too; his first few moments.......I'm glad to have been around for the program.
    As to nat. gas..........hmmmmm, how about some hot money looking for a sleepy area in which to play for a few thinks so.
    We do live among the gamblers, yes?
  • +1 Catch

    The video clip is out there. Enjoyable to view. But I didn’t want to try people’s patience with it. Thanks for commenting.
  • Hank, I'm working on a pot of chili. I'll get back to you.
  • Take some metformin and you want even need chili.
  • My wife assures me that my personal supply of natural gas is at an all-time high. :)
  • @OLd_Joe: Now I understand why she calls you an old Fa- - !
  • @Ted- She calls me worse than that. Something to do with the natural gas orifice, I believe.
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