Thursday, March 29, 2012

The Perfect Storm For Natural Gas and UNG, Now You See Why UNG Reversed Split Was the Kiss of Death; Full Report

This is quite remarkable: Natural gas prices are almost at a 1 handle.

Today's reason for the big drop was that storage actually increased in North America, this still in March. The red curve is the current year's curve, compared with the average 5 year range in shaded gray. Amazing.

The woeful UNG reacted accordingly, remember the kiss of death post on UNG?

5 year chart:

Contango is now at a huge 5.5% on the two front months contracts.

Contango us UNG's killer.

Indeed the perfect storm for UNG today.

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1 comment:

Unknown said...

So true. It's certainly not a vehicle for anyone considering nat gas.

One could consider a number of nat gas procuers, although with the current competitive fracking efforts, there is a glut overhang depressing prices.

What's one to do? The transmission and pipeline companies are probably the way to keep exposure. You can receive an income stream while preserving capital.


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