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Friday, May 15, 2015

Market report: Natural Gas (NYMEX)

Market report: Natural Gas (NYMEX)

The natural gas has climbed more than 8% since the beginning of the month and is actually an attractive instrument to buy.
June Natural gas settled at $3.01 per million British thermal units with a gain of 4.7% this week.
Natural gas in an effective fuel because it is efficient and clean and it is available from domestic resources.
The production of has increased due to advanced in technology to extract the gas.
The low cost of natural gas has become attractive to replace other energy sectors like electricity.
The domestic demand for natural gas is growing faster and become an active instrument to trade.

The number of rigs in may is 894, more than 1000 rigs has been cut since 2014 but the production is still growing reaching a record of 74.3 billions cubic feet per day in December 2014.



Source: EIA

For that reason the gas price slumped as much as 28% since May 2014.
We see an opportunity in the gas market and estimate a price growth in the short term due to an increase in the forecast demand for the year and next years to come.


52 week low: 2.48
52 week high: 4.26




UNG

52 week low: 12.28
52 week high: 26.42

The United States Gas fund ETF is entering in a bull trend line and is a good alternative to trade the gas.

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