Whether we agree on the reasons or not, the fact is prices are up, and it was a great long bet. And, there are many producers that are going to have huge yoy earnings increases going forward.
You need to look at storage figures to understand just how squeezed the natgas market became. And because of years of flat prices, not many new gas fields were being drilled. Did traders make it worse? Of course, that is the way it works. And demand is up, storage supplies down, and part of the reason are those natgas fired electric generation plants, and cheap gas was the reason they were built in the 1st place. But then again, a well managed utility is probably holding natgas winter delivery contracts for 4-4.50 bucks per mcf. It's the ones that didn't hedge that are buying in the cash market, and they, and their customers are getting creamed, big time. It is more complicated than that, but those are facts. I was long them from 2.75 per, but got out a bit too early...the Feb futures were down 15% today. A look at natgas futures out 6-12 months, and you will see the squeeze is now, not later. I trade energy futures when I sense a grand slam coming, and I was buying crude long when it was $10 per barrel, which seems like a long time ago. And if the mid-east ignites, or this opec output cut sticks, we go back to $30+ oil. |
