This morning’s price action in natural gas dropped over 4% despite last week’s draw of 228 billion cubic feet against analysts’ expectations of 222 billion cubic feet and 144 cubic feet the prior year.
China is becoming one the biggest energy consumers, giving the U.S. a run for its money, or should I say energy.
The advent of fracking has so lowered the price of natural gas (UNG, quote) that many alternative energy firms have been driven into bankruptcy. China’s JA Solar Holdings (JASO, quote) is down more than 70% for the last year of market action, suffering like so many others in the sector who overbuilt in better times.
Although there would not seem to be an obvious correlation between natural gas (UNG, quote) and corn (CORN, quote), the record heat in the United States has resulted in one. Both the exchange traded funds for natural gas and corn are up as a result of the heat; both will likely fall once the weather cools.
Natural gas prices got a boost upward after the U.S. Energy Information Administration reported inventory supply climbed by 6 billion cubic feet less than expected last week. Actual results came in at 28 billion cubic feet against expectations of 34 billion cubic feet.
Investors in commodities ETFs largely kept their money in place even as values fell sharply during the second quarter of the year.
The Organization of Oil Exporting Countries (OPEC) may be collapsing. If so, it is due to fundamental economic demands and the force of the market.