Chart(s) of the Week: Nasty Weather and Natural Gas

It’s downright frigid in Chicago. Walking to the train this week felt like we were in one of our parents’ stories of walking to school in the snow and cold (uphill… both ways) It’s “A Christmas Story” tongue stuck on a pole kinda weather.

A Christmas Story

But we’re numbers people, did a little digging on the Weather Channel Website, and found that, “For First Time in 20 Years, Cold Records May Beat Warm Records in U.S..”  And what do a lot of Americans use to heat their houses these days. It’s not Heating Oil. It’s Natural Gas, which has been taking on a decidedly winterized look the past two years, via this nice chart by EIA via the Motley Fool.

Natural Gas Boston Chart Courtesy: EIA

“..natural gas prices are touching levels seen only twice previously over the last twenty years {in Boston} (during Hurricanes Katrina and Rita, with the second being the extreme commodity price run-up of 2008).”

On the futures side of things, for one reason or another, there has certainly been the development of a trend on the Natural gas side of things.

Nat Gas Daily
(Disclaimer: Past performance is not necessarily indicative of future results)
Chart Courtesy: Finviz.com

One could argue that this is somewhat surprising, especially given the rise in fracking for Natural Gas, suggesting that more supply wouldn’t push up prices (even with the cold temps). But does this really have anything to do with weather at all? The last time Natural Gas futures numbers were at this level was back in much balmier April.

Larger Nat Gas

(Disclaimer: Past performance is not necessarily indicative of future results)
Chart Courtesy: Finviz.com

Those may look like some big moves up in April, down into August, and back up again since November. But Natural Gas really hasn’t been doing much of anything since the middle of 2009 as you can see below. Whether this trend persists remains to be seen, and boils down to whether there is enough perceived current and future demand (be it from gas powered furnaces or city buses converting to clean natural gas) to match the huge amount of supply?

 

Weekly Natural Gas(Disclaimer: Past performance is not necessarily indicative of future results)
Chart Courtesy: Finviz.com

 For now, we’ll keep cheering it higher for all those trend followers on the current up move, and our clients in the Gas business down Houston way.

Write a Comment

The performance data displayed herein is compiled from various sources, including BarclayHedge, RCM's own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.

Benchmark index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.

Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.

Investors interested in investing with a managed futures program (excepting those programs which are offered exclusively to qualified eligible persons as that term is defined by CFTC regulation 4.7) will be required to receive and sign off on a disclosure document in compliance with certain CFT rules The disclosure documents contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA, as well as the composite performance of accounts under the CTA's management over at least the most recent five years. Investor interested in investing in any of the programs on this website are urged to carefully read these disclosure documents, including, but not limited to the performance information, before investing in any such programs.

Those investors who are qualified eligible persons as that term is defined by CFTC regulation 4.7 and interested in investing in a program exempt from having to provide a disclosure document and considered by the regulations to be sophisticated enough to understand the risks and be able to interpret the accuracy and completeness of any performance information on their own.

RCM receives a portion of the commodity brokerage commissions you pay in connection with your futures trading and/or a portion of the interest income (if any) earned on an account's assets. The listed manager may also pay RCM a portion of the fees they receive from accounts introduced to them by RCM.

See the full terms of use and risk disclaimer here.