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Natural gas prices are on the rise, off the back of the hot weather that is expected across the US this week. Hot weather is fantastic for natural gas stocks, as people reach for their air conditioning units (which often run on gas powered electricity). And at this moment in time it couldn’t be better – there is a surplus of gas and this hot weather might be the thing to shrink it…
Natural gas inventories are well above average levels for this time of year, and that comes of the back of weak demand and strong production. However, this week’s weather forecast looks like it could be thing we need to shrink those inventories, and put demand in line with production.
With that in mind, we are expecting the price of natural gas to rise as demand creeps up and inventories fall. Consequently, we are going long Nat Gas until next Friday.
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