22 Apr

How Do El-Niño and La-Nina Impact Natural Gas Prices?

WRITTEN BY Gordon Kristopher

El-Niño and La-Nina  

When El-Niño occurs, it keeps the sea surfaces warmer. This causes milder-than-normal cold temperatures across the sea and some parts of the US. In contrast, when La-Nina occurs, it keeps the sea surfaces colder. This causes colder-than-normal temperatures in the central Pacific Ocean and some parts of the US over a period of 10–12 months.

How Do El-Niño and La-Nina Impact Natural Gas Prices?

US natural gas inventory

The El-Niño weather pattern was predominant in 1997–1998 and 2015–2016. Milder-than-normal temperatures led to a rise in the inventory due to less heating needs during the winter seasons. This was followed by La-Nina in 1999. This pattern led to a decline in the natural gas inventory. The same situation could repeat in 2016 or 2017 after the 2015–2016 El-Niño. It led to near record US natural gas inventory during this period of the year. To learn more about the US natural gas inventory report, read the next part of the series.

How Do El-Niño and La-Nina Impact Natural Gas Prices?

Natural gas prices during El-Niño 

The El-Niño period saw depressed natural gas prices in 1997–1998 and 2015. After El-Niño, natural gas prices rallied from $2 per MMBtu to $10 per MMBtu between January 2000 and October 2000. Will this happen again? We’ll discuss this more in the next part. The uptick in natural gas prices has a positive impact on natural gas producers’ margins like EV Energy (EVEP), Memorial Production (MEMP), Gulfport Energy (GPOR), Cabot Oil & Gas (COG), and Comstock Resources (CRK).

How Do El-Niño and La-Nina Impact Natural Gas Prices?

Impact on ETFs

The rollercoaster ride in natural gas prices impacts ETFs and ETNs like the PowerShares DB Energy Fund (DBE), the VelocityShares 3x Inverse Natural Gas ETN (DGAZ), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), and the Fidelity MSCI Energy ETF (FENY).

Latest articles

This year, Pfizer (PFE) stock has fallen 0.34% and Bristol-Myers Squibb (BMY) stock has fallen 6.48%. Both companies are focused on strengthening their position in the high-growth oncology and immunology markets. Let's take a closer look at each.

Walt Disney’s (DIS) latest movie, Toy Story 4, has reportedly broken records in the opening weekend with $118 million in sales. However, the opening weekend collection was behind analysts’ expectations of at least $150 million in the first weekend.

24 Jun

Will Home Depot’s Upward Momentum to Continue?

WRITTEN BY Rajiv Nanjapla

As of June 21, Home Depot (HD) was trading at $209.39, which implies a rise of 9.7% since the announcement of its first-quarter earnings on May 21. Also, the company was trading at a premium of 32.4% from its 52-week low of $158.09 and a discount of 2.8% from its 52-week high of $215.43.

On June 21, Aurora Cannabis (ACB) made an announcement that indicated that it will move towards higher margin vape products. In addition, the company also believes concentrates and edibles will command higher margins. In anticipation of this development, the company announced the expansion of its facility to capitalize on growth related to these segments.

Shares of Mondelēz International (MDLZ) are scaling new heights thanks to its stellar gains so far this year. Mondelēz stock is up 38.0% on a YTD (year-to-date) basis, and it closed at $55.25—just a shade lower than its 52-week high of $55.71—on June 21.

24 Jun

How Long Will Facebook's Libra Fuel Bitcoin Rally?

WRITTEN BY Mayur Sontakke, CFA, FRM

Ever since the news about Facebook’s (FB) cryptocurrency project broke, Bitcoin has rallied on the hope that Facebook’s entry in the space will help make cryptocurrencies mainstream. Facebook’s cryptocurrency will be called Libra and will be governed by an association with 28 founding members across industries.

172.31.71.127