Can USCF's new fund tackle the natural gas contango?

United States Commodity Funds' new ETF, the U.S. 12-Month Natural Gas Fund (NYSEArca: UNL), began trading yesterday, offering investors another easy access point to the natural gas market. But let's hope it sees smoother sailing than its controversial cousin, the U.S. Natural Gas Fund (NYSEArca: UNG).

Not only have regulators vociferously blamed UNG for distorting the commodity markets earlier this year, the fund has also performed dismally to date, dropping a whopping 61.24 percent since the beginning of the year. And it's not because investors have lost their taste for the fund: Last month, UNG still saw brisk inflows of $308 million, even as its net assets dropped $263 million.

Record-low natural gas prices have played their part in slashing UNG's returns, of course, but the big anvil weighing the fund down is the market's nasty

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Sponsors of the United States Natural Gas Fund (NYSEArca: UNG) took baby steps toward restoring the fund’s ability to issue new shares yesterday.

 

Sponsors of the United States Natural Gas Fund (NYSEArca: UNG) took baby steps toward restoring the fund’s ability to issue new shares yesterday.

UNG is an exchange-traded fund that invests in the natural gas futures market. The fund stopped issuing new shares on Aug. 12, citing regulatory uncertainty in the commodities marketplace. The Commodity Futures Trading Commission is investigating the role of ETFs in the commodities market and is expected to announce strict position limits for such funds. Many expect the $4 billion UNG ETF to exceed the allowable limits, as it controls a significant portion of the front-month natural gas futures market.

Since halting the issuance of new shares, UNG has traded at a sharp premium to its underlying net asset value, as demand for the fund has outstripped

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Natural gas prices are dropping like a rock today, but the bearishness is not preventing a few bulls from taking million-dollar stands. As winter approaches, things are going to get very interesting.

The gap between the crude and natural gas markets continues to expand. The world is concerned with having too little of the former and too much of the latter.

As I write, front-month natural gas futures are selling at a level we have not seen since August of 2002 (when the equities market was claiming a low of its own), just $2.93 per million BTUs.

The contract price has fallen by more than 6% during today’s session.

It is certainly not good news for domestic companies that worked overtime to expand their drilling range during the bullish run we saw over the past several years.

Pennsylvania, West Virginia, Ohio and New York all saw companies like Chesapeake Energy (NYSE:CHK) and

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Natural gas is finally moving substantially higher today as we a href="http://www.marketwatch.com/story/natural-gas-extends-gains-after-inventories-data"got the inventory data out/a:br /br /blockquoteNatural-gas futures extended gains Thursday after the Energy Information Administration reported U.S. natural gas inventories rose 90 billion cubic feet last week, smaller than some analysts had expected. Some analysts surveyed by energy information provider Platts had projected a buildup as big as 106 billion cubic feet. After the data, August natural gas futures rose 17.9 cents, or 5.5%, to $3.462 per million British thermal units. It was up less than 3% before the data. At 2,886 billion cubic feet, stocks were 589 billion cubic feet higher than last year at this time and 454 billion cubic feet above the five-year average.br //blockquotebr /Hopefully the trend will continue. We're finally heading into a time of year in which demand ticks higher. How much, remains to be seen.br /br /Lot's of big ...

For Immediate Release

Chicago, IL - May 21, 2009 - Zacks.com releases the latest Zacks Industry Rank. Stocks featured in this week's analysis include Apache Corporation (APA), Forest Oil Corporation (FST), Newfield Exploration Company (NFX), Ultra Petroleum Corporation (UPL) and United National Gas Fund (UNG).

Zacks Industry Rank Analysis is written by Charles Rotblut, CFA, Senior Market Analyst for Zacks.com.

This Week: Better Trends for Energy E&P Companies

We might be moving closer to a turnaround for oil & gas exploration and production (E&P) companies. During the past 2 weeks, the number of positive revisions to full-year earnings estimates for the group has doubled, rising from 125 to 250.

This shift has caused the revisions ratio to turn positive, meaning that there are more positive than negative

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United States Natural Gas Fund - UNGNatural Gas has been one of the hardest hit areas of the market, getting beaten down even worse than Oil, losing 80% of its value since July 2008. Earlier this week, natural gas futures hit their highest point in 3 months, indicating a recovery is in the works. Since hitting a new 52-week low of of under $13 just last month, United States Natural Gas Fund UNG div class="feedflare" a href="http://feeds.feedburner.com/~ff/StocksAdvice?a=v2XAi6O2mQY:vLci9rxmoJo:XhI0_UKdTUU"img src="http://feeds.feedburner.com/~ff/StocksAdvice?i=v2XAi6O2mQY:vLci9rxmoJo:XhI0_UKdTUU" border="0"/img/a a href="http://feeds.feedburner.com/~ff/StocksAdvice?a=v2XAi6O2mQY:vLci9rxmoJo:yIl2AUoC8zA"img src="http://feeds.feedburner.com/~ff/StocksAdvice?d=yIl2AUoC8zA" border="0"/img/a a href="http://feeds.feedburner.com/~ff/StocksAdvice?a=v2XAi6O2mQY:vLci9rxmoJo:7Q72WNTAKBA"img src="http://feeds.feedburner.com/~ff/StocksAdvice?d=7Q72WNTAKBA" border="0"/img/a a href="http://feeds.feedburner.com/~ff/StocksAdvice?a=v2XAi6O2mQY:vLci9rxmoJo:V_sGLiPBpWU"img src="http://feeds.feedburner.com/~ff/StocksAdvice?i=v2XAi6O2mQY:vLci9rxmoJo:V_sGLiPBpWU" border="0"/img/a a href="http://feeds.feedburner.com/~ff/StocksAdvice?a=v2XAi6O2mQY:vLci9rxmoJo:qj6IDK7rITs"img src="http://feeds.feedburner.com/~ff/StocksAdvice?d=qj6IDK7rITs" border="0"/img/a a href="http://feeds.feedburner.com/~ff/StocksAdvice?a=v2XAi6O2mQY:vLci9rxmoJo:gIN9vFwOqvQ"img src="http://feeds.feedburner.com/~ff/StocksAdvice?i=v2XAi6O2mQY:vLci9rxmoJo:gIN9vFwOqvQ" border="0"/img/a a href="http://feeds.feedburner.com/~ff/StocksAdvice?a=v2XAi6O2mQY:vLci9rxmoJo:dnMXMwOfBR0"img src="http://feeds.feedburner.com/~ff/StocksAdvice?d=dnMXMwOfBR0" border="0"/img/a /divimg src="http://feeds.feedburner.com/~r/StocksAdvice/~4/v2XAi6O2mQY" height="1" width="1"/

Energy earnings start each season with the release of Schlumberger Ltd. [SLB: 46.23, 0.00 (0.00%)] on a Friday.  As every seasoned investors knows, energy stocks are one of the most volatile sectors to play when companies release their quarterly results.  Often times it is a question of tracking how crude oil and natural gas preformed during the quarter in order to determine how the earnings season will treat the energy names, but this time around I believe there will be a lot of money to be made with counter-intuitive thinking.  Before getting into that, it is important to track where we have been during the course of the quarter.

Believe it or not, crude oil actual rebounded slightly during the first quarter of 2009 rising from $44.60 to $49.66 for a gain of 11.34%.  Oil strength was mostly due to a rebound across all asset classes, especially after oil had

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After an unparalleled fall, natural gas prices could double by next year, as a growing number of idle rigs create a supply crunch.

Natural gas prices have tumbled by about 30% this year, as a steep drop in industrial consumption has undermined demand. However, many of the traders and hedge funds that placed speculative bets on the price decline are beginning to reverse course and bet on a price spike, as dwindling production is starting to outpace slumping demand.

Traders trimmed their net short positions on gas by 11% to 114,064 in the week ended March 10, the smallest since last July, Bloomberg News reported. Also, natural gas futures for delivery in January 2010 are trading at a 49% premium to the April contract, which means speculators are anticipating a price surge.

In its short-term energy outlook - released on March 10 - the Energy Information Administration said

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The Dow Jones Industrial Average closed below 10,000 today for the first time in four years. The sell-off has been particularly brutal among stocks levered to commodities and the global growth story, with most names down over 60% since oil peaked in July, and many hitting multi-year lows. This summer’s surge in resources was mainly fueled by the thesis that the ranks of the world’s middle class are swelling in the developing world, and that these newly affluent people will hunger for materials. If you believe that this macro long-term trend remains intact, and that the current financial crisis amounts to little more than a speed bump, then it is a good idea to compile a shopping list of cyclical stocks that could bounce back hard during a broader market turnaround.

There were several indications that today’s intraday lows could mark at least a short-term bottom. The

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No one knows where oil is heading. Only four months ago (May ’08), oil cleared $120 a barrel on its way to $145. Within a month, analysts were calling for $150, even $200 oil. Countless graphs and charts surfaced showing how demand was outpacing supplies. Pundit after pundit commented that emerging markets like China and India were fueling an unstoppable mega-boom for black gold. Then Russia invaded Georgia, and oil took a nose dive falling more than 20 consecutive days from $145 down to $115 a barrel. Hurricane Gustav gave it a brief shot in the arm, but the damage was less than expected and oil rolled over the next day. Now analysts are predicting oil will fall to $100 or even $85 a barrel. Again the charts and graphs are surfacing, this time showing that both international and domestic demand for oil is ...