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Real Time Insight

Natural gas prices have been quite volatile in 2012, trading over a wide range. The important commodity started the year at about $4/MM Btus, plunged down to $3, before trending back towards the four dollar mark once again in the fourth quarter.

However, just in the past few weeks, natural gas prices have slumped, falling about 40 cents or 10% just from their Q4 high, leaving them at their current level around the $3.7 level.

Some traders in the space have clearly been spooked by the unseasonably warm weather across much of the Northeast and especially here in the Midwest. Yet prices have come back in recent days as the latest forecast suggested a fresh period of cold weather, a prediction that helped to boost natural gas about 4.6% in Wednesday trading alone.

Clearly natural gas is at a crossroads, and the important but often volatile product needs some direction as we head into 2013. Which direction do you think it will be?

Will warm temperatures and fracking keep natural gas under pressure again this winter, or will a cold patch and hopes of natural gas exports and more industrial activity boost prices back higher?

Personally, I think that natural gas is heading lower as there is just too much supply in the market, and hopes for exports in the short-term seem farfetched at best, but what about you?

Let us know what you think in the comments below!

Zacks Releases Their 7 Best Stocks for August, 2014

These 7 were hand-picked from the list of 220 Zacks Rank #1 Strong Buys with earnings estimate revisions that are sweeping upward. Their stock prices are expected to rise sooner than the others.

Today, this Special Report is available to new Zacks.com visitors free of charge.

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