Is UNG a good buy longer term? Perhaps given a rebound in the economy, some hotter weather and possibly a colder winter. One big weather player for months has been sugar, which has soared on world production deficits, and right now I am watching the Indian Monsoon very closely for clients, which is a major factor in sugar’s recent move.
Maps are trending a tad warmer, but no major sustained big heat for the east, but as suggested Sunday night,
not as bearish natural gas with increased humidity levels, some occasional 90’s and changing teleconnections
that will result in slightly above normal CDD demand for the country as a whole.
Nothing really going on in the tropics, but at these price levels, given a rebound in the economy, a possible
cold winter and warmer weather, this is “tad” more friendly than it has been.
I have a hard time thinking that deferred natural gas will collapse and has likely seen the lows, given
the economy coming back, a seasonal to go long that has worked 13 of the last 15 years, and “some” increased cooling demand going into mid-late August. If we did not have a weak El Nino, and had a potentially more active hurricane season, this would be higher confidence.
Regarding the winter, in my opinion, there are many, many teleconnections and studies that support a cold winter. However, I still believe strongly in the connection that if we go into a moderate or strong El Nino, this could complicate matters some, as historically we have had warmer winters. With so many other cycles suggesting cold winter weather, as long as we stay in the weak El Nino phase, the chances
for this might be 75%. Most models, forecasters, etc. continue to call for at least a moderate El Nino.
AO INDEX HAS TO DO WITH WEATHER OCCURRENCES AT THE N. POLE. A NEGATIVE INDEX, LIKE WE HAD IN JULY, REPRESENTS HIGHER PRESSURES AND COLDER AIR DIVING SOUTH. NOW THE INDEX
IS GOING POSITIVE.
THE NAO INDEX HAS TO DO WITH BLOCKING PATTERNS NEAR GREENLAND. A NEGATIVE NAO WAS PARTLY RESPONSIBLE FOR THE WET WEATHER IN THE EAST RECENTLY AND SOME COOL SPRING
AND EARLY SUMMER WEATHER. THE INDEX WILL GO MORE NEUTRAL TO POSITIVE HELPING THINGS NOT TO BE AS WET IN THE EAST, AND A BIT WARMER.
