Why It's Over for Natural Gas

oil refinery
Richard du Toit | Gallo Images | Getty Images

As we find ourselves deep into the winter, it is becoming increasingly clear that we are not getting the cold weather and the demand that comes with it to push natural gas higher.

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That is why for the Feb contract I am a seller, we could see a 2 dollar handle when Feb expires on Jan 29th.

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Here are the facts behind the reasoning, Last week on "Futures Now" I said I thought natural Gas which was trading at 318 would get back to the 332 area, well it went to 335 and then failed miserably.

We just went through the warmest summer on record and natural gas never rose above the 350 level. The outlook for temperature in the northeast for the next 3 weeks is projected to be above average, the demand in this moderate winter won't match the summers, in fact in the last two months, supplies have risen from 8 percent higher year on year to 13 percent higher.

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Natural gas is not affected by geo politics, it is a domestic market, we cannot export at this time significant amounts, so whatever is produced, and its more every day, stays here. That is why from now till the end of the month I am a seller of rallies in natural gas, if it rises to 330 -335 sell it. and look for 285.


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