Record cold weather in America has the exchange traded fund for natural gas, United States Natural Gas (NYSE: UNG), up more than 36 percent for the quarter. The exchange traded funds for coal, Market Vector Coal (NYSE: KOL), and oil, United States Oil (NYSE: USO), have not soared like natural gas. As detailed in another on this site, oil company stocks are falling, too. This could lead to United States Natural Gas plunging in the future.
The arctic weather in the United States has greatly increased the demand for natural gas.
As a result, natural gas prices have skyrocketed, according to Bloomberg commodity stats. That is what has led United States natural gas to soar. But it has not been the same for United States Oil or Market Vector Coal. A big reason for that is the lack of pipeline in the United States. The use of natural gas in New England has increased nearly 20 times. But the amount of pipeline has barely budged.
For investors, United States Natural Gas could tumble soon.
It is already down for the last week of market action. As the demand starts to lighten, it could tumble even more. The data from MacroAxis is very compelling for this event. Investors should look to profit from what should be that eventuality with United States Natural Gas.
As winter is not nearly over, anything done should be to prepare for the spring months.
There could easily be more bad winter weather coming to New England. So United States Natural Gas could soar again. But as seen from Market Vector Coal and United States Oil not moving as much, the price gain for United States Natural Gas has more to do with the inefficiencies in the pipeline network than consumer demand. That too is supported by Macroaxis will make for very high utility bills in New England in the short term. It should also lead to United States Natural Gas falling in price for the long term.