Commodities Essential - June 8, 2011

Hodgepodge … 

Plus: Commentary on Natural Gas, Crude Oil, and Silver  

The EIA is out with a report that suggests natural gas could be entering a golden age. The popular data point from this report is that consumption of Nat Gas could increase by 50% by 2035. We know that natural gas prices have been bogged down by new discoveries and increased production in the US and around the world. To that point: “The IEA says there are enough gas resources to sustain current production levels for more than 250 years,” according to the Wall Street Journal. But this expectation of demand increasing notably over the next 20+ years creates a more bullish scenario for gas prices. Add to that two other items: 

Commodities Essential. 7 June 2011

Trade Essentials.

The move in natural gas has been nice. If a longer-term trend is to develop here, then natural gas will likely be able to hold well above the $4.00 level. If it cannot, then it is likely because it is being dragged down by a change in sentiment within the industry or within the broader commodities market. Let’s adjust our stop-loss level to a place that is just below the 50- and 100-day moving averages on UNG. Details for this UNG adjustment are below:

UNG (Last Price: $12.18)

Cancel and Replace your order to sell all shares of United States Natural Gas Fund, symbol UNG, at $10.25, STOP. NEW PRICE: Sell all shares of United States Natural Gas Fund, symbol UNG, at $11, STOP; this order is good till cancelled.