Monday, June 21, 2010
Natural gas prices have been extraordinarily volatile over the past 15 years, and the recent experience is no exception—at today's $5.12, prices have more than doubled since last September, yet they are still less than half what they were in 2008. I don't pretend to understand much about this market, but I note that the recent rally may be due to hedge funds that are being forced to buy back their short positions. Presumably they thought that massive new gas discoveries would combine with a weak economy to keep prices depressed. Commodity price speculation can cut both ways, as those who were betting on deflation have now learned.
Posted by Scott Grannis at 9:29 AM