Natural gas hands us monstrous gains!
Today's Financial News - Posted November 19, 2009
Natural gas prices continue to fall, which means those of us that saw the downturn coming are locking in strong profits. Just today, we locked in gains of 400%!
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): The folks here in the TFN office wanted me to write one of those annoying I-told-you-so articles, bragging about the monstrous gains we just locked in over at TFN Strategic Trader.
While 400% gains are worth bragging about, they do you no good unless you followed my advice. What will do you some good is an explanation of how we locked in such sizeable profits.
It is all thanks to the nation’s natural gas market. After years of working tirelessly to tap new reserves and find more efficient ways of drilling, the nation now has way more gas on its hands than it knows what to do with.
A warmer-than-usual November has added even more fuel to the sector’s implosion.
Thanks Mr. Gore!
After a sudden spike earlier in the week due to a strong move by the dollar and some wavering economic data, gas prices have continued their recent downward trend throughout the week.
This morning, all eyes were on the Energy Information Association’s weekly inventory report.
Normally, this is the time of the year when producers stop injecting natural gas into the nation’s storage wells and start withdrawing from their stockpiles. But with an economy that won’t budge and consumers putting on an extra sweater instead of ratcheting up the thermostat, there is no sign of a withdrawal anywhere in sight.
During the week of November 13 (which is the freshest data set, just released at 10:30 a.m. today), the nation put yet another 20 billion cubic feet (Bcf) of natural gas into storage.
This time last year, we put in half that figure.
But more importantly, a year ago we had just 3,486 Bcf in storage. Right now, the figure stands at a record-breaking 3,833 Bcf, 347 Bcf higher than a year ago and 419 Bcf above 5-year norms.
And here’s the real kicker. We are just about out of storage space. With 3,889 Bcf in total storage capacity, just two or three weeks with injections like we saw this week could spell disaster.
After months of denying a massive surplus, commodities traders are finally pricing in a major glut. Prices have fallen precipitously in the past few weeks, dropping from just shy of $6.00 per MMBtu to as low as $4.157 per MMBtu in early floor trading today.
Here comes the bragging
This is perfect news for TFN Strategic Trader members as I released my latest in-depth report, in which I warned against plunging prices, at almost the exact peak of prices.
In the report, I recommended four ways to play the situation.
How are we doing? Without bragging, quite well. All four picks are up by double-digit proportions. But our biggest winner surged by a whopping 400%! We sold half the contracts this morning and are now playing with the house’s money.
For the folks that took my advice, life is good today.
Feel free to read the updated report right here.
Next Article: TFN eNews 11/19/2009: Monstrous gains from falling gas prices
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