Forget oil for a moment. It's natural gas that is surging lately on light inventory reports. Goldman Sachs upgraded several natural gas names today. The commodity has risen 71% year-to-date -- compared to the crude oil gain of 43% YTD.
Guest energy trader Joe Terranova from Phoenix Investment Partners says now is the time to trade natural gas. The early summer heat and hurricane fears will only fuel more demand for the commodity. Natural gas could rally 10% from now -- even more if a hurricane should strike.
Also supporting natural gas prices is options expiration at the end of the month. Natural gas probably will remain a first-half summer story, peaking in early July. Domestic production will continue to grow and that should bring down prices eventually.
Again, weather is the main driver of natural gas prices -- the month of June has been abnormally hot in most parts of the country.
Among his plays for the moment, Terranova lists United States Natural Gas Fund, LP, Apache Corporation, Devon Energy Corporation and Chesapeake Energy Corporation.
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Trader disclosure: On June 12, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (BTU), (C), (AGU), (GS), (INTC), (NUE), (MSFT); Najarian Owns (AAPL), (AAPL) Puts, (ANR), (BHI), (BYD), (CHK), (HPQ), (TSO), (XLF); Macke Owns (MSFT), (INTC), (DIS), (WMT); Finerman's Firm is Short (IYR), (IJR), (MDY), (SPY), (IWM); Finerman's Firm Owns SPX Index Puts, (XME), (XME) Puts, (MSFT), (SUN), (TSO), (VLO); Finerman Owns (GS); Finerman's Firm And Finerman Owns (C), (C) Leaps, (CYBX); Terranova Is Long December 2008 Crude Oil; Terranova Is Short December 2009 Crude Oil; Terranova Owns (FXC), (LUV), (GS); Phoenix Investment Partners Ltd. Is Long Airtran Holdings, Alaska Air Group, American Airlines, Apache, BP PLC, British Airways PLC, Chesapeake Energy, Chevron, ConocoPhillips, Continental Airlines, Delta Air Lines, Deutsche Lufthansa, ENI SPA, ExxonMobil, Gazprom OAO, Hawaiian Holdings, Hess, Holly Corp., Husky Energy, JetBlue Airways, Lukoil, Marathon Oil, Murphy Oil, Occidental Petroleum, PetroBras Intl. Fin., Petro-Canada, Petroleo Brasileiro S.A., Petroleos De Venezuela SA, Qantas Airways, Republic Airways Holdings, Royal Dutch Shell PLC-A SHS, Skywest, Southwest Airlines, Suncor Energy, Sunoco, Tesoro, Texaco Capital, Total SA, United Airlines, US Airways Group, Valero Energy; Fleckenstein Is Short (COF); MIKE DARDA HAS NOT PROVIDED DISCLOSURES IN ADVANCE OF BROADCAST; Bernstein And/Or Affiliates Exercise Investment Discretion Over Accounts Owning More Than 1% Of (GOOG), Bernstein Is A Market Maker In (GOOG), (YHOO); GE Is The Parent Company Of CNBC