Polar Vortex Is Back!

| November 7, 2014 | 0 Comments

Cold temperaturesWow…

The natural gas market is on fire!

The commodity is by far the best performing hard asset over the past week with a 14% gain. It wasn’t long ago natural gas had slumped to $3.60 mmBtu. An unseasonably warm October had natural gas bulls lounging in the barn.

But then November hit…

And with it came a sudden blast of cold air. In fact, the Eastern US has been mired in below average temperatures since last weekend. With Old Man Winter making his presence known, consumers are cranking up the heat. In response, investors are pushing natural gas sharply higher to $4.40 mmBtu.

See for yourself…

Natural Gas

As you can see, the recent onset of cold is bringing natural gas bulls back into the market in a big way.

And feast your eyes on this…


As you can see, the NOAA is expecting frigid temperatures for nearly 60% of the US over the next 6-10 days. And believe it or not, meteorologists at Accuweather.com are actually using the term “polar vortex” again.

What the heck is that?

As you may remember from last winter’s exceptional cold, a polar vortex is when frigid artic air descends from the North Pole into the US. It’s an unusual weather pattern, but when it occurs, it pushes temperatures sharply lower.

And keep in mind…

Despite unusually large EIA inventory builds over the past few weeks, US natural gas storage is still 6.2% below last year and 6.8% below the five-year average. If colder than normal temperatures dwindle into December, and the official start of winter, we may have a repeat of last year. 

You know, when natural gas exploded over $6.00…

Obviously, the weather will be the deciding factor in where prices go from here. But there’s no question the cold start to the winter of 2014/15 is bullish for natural gas.

How can you capitalize on it?

The easiest way to bet on rising natural gas prices is with US Natural Gas Fund (UNG). If the commodity rises, so does UNG.

If you want a bit more excitement (and more risk) consider the Proshares Ultra DJ-UBS Natural Gas (BOIL). The leveraged ETF garners returns 2x that of daily natural gas price fluctuations.

Until Next Time,

Justin Bennett

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Category: Natural Gas

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.