Can natural gas continue to rise?

Market Pulse: November 20

Last week January NG opened at $3.620 mmBtu and closed the week at $3.830. 

The monthly chart says it all. First look at the highs the past 12-years. Would anyone like to take a guess at what happened in late 2000 to cause natural gas to double hitting the high in December 2000 of $10.100? You would be surprised, and does anyone remember Enron? By February 2003 we had a high of $11.899 and in 2005 the contract high was hit in December at $15.780. The final number to look at is July 2008, which hit $13.694. Of course in June-July 2008 everything was up on a very weak US dollar and that is when everything came crashing down. The move down from July 2008 to April 2009 was more than $100,000 per contract. So why the price spikes in 2000, 2003, and 2005? Could it have been low supplies and increased demand? Possibly. The spike in 2008 occurred in June and July, not a huge demand for NG at this time. Look at how volume has changed from 2000-2012. Now ask yourself what has caused this huge increase in volume? And that is where the answer lies. I did highlight the month of September as I find it a very interesting month for NG.

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