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November 20 Natural Gas Update
Natural gas prices are higher this morning. The EIA report yesterday came within 1 Bcf lower than the Reuter's expectations and brought us to another new record for total gas in storage of 3,833 Bcf. The market reacted by dipping slightly, but it was not to last as the natural gas community turned around and began to stage a small rally. December's wholesale exchange natural gas contract put in a new low for the session at $4.175 then rallied up to settle at $4.342 to settle higher by $0.088 on the day.
It seems no one had a good answer whether the rise was driven by traders getting an early start covering short positions or the up coming holiday week or colder weather reports surfacing for the South in both the 6-10 and 11 to 15 day forecasts. Either way, we made new highs in the afternoon and settled up in that area. The question for today is whether or not the buyers can keep the momentum going into the weekend.
In other natural gas news, it was announced that the U.S. Commodity Funds had completed the 28 month process and launched their U.S. 12-Month Natural Gas ETF (UNL). This ETF will attempt to trade the movements in the price of the nearest 12-month NYMEX futures strip unlike its sister ETF which attempts to replicate the price movements of the NYMEX near month futures contract. This is the second 12 month strip product that they have launched as they launched a similar trading ETF to track the first 12-month strip of NYMEX crude oil back in December 2007.