Dallas, Texas 08/06/2014 (FINANCIALSTRENDS) – VelocityShares 3X Inverse Natural Gas ETN linked to the S&P (NYSEARCA:DGAZ) is moving to recovery mode, if recent trends in stock prices are graphed. The ETN continues to be influenced by US recovery mode as US largest natural gas producer now bears the largest crude oil producer crown this year.
Industry studies and Bank of America report noted that the output exceeded 11 million bbl per day in the first quarter making the US the largest crude producer.
Spike In Gas Prices On July 4 And Subsequent Fall Sharp
VelocityShares 3X Inverse Natural Gas ETN linked to the S&P (NYSEARCA:DGAZ) were affected by the spike in prices July 4, followed by the sharp loss in natural gas prices on July 7. Most affected were the likes of Chesapeake Energy which saw a fall of 4.7%, in nearly 6 months. The main reason of the sudden fall was attribute to weather pattern changes, which play on the utility consumption patterns by consumers. This year the milder weather and less scorching heat has meant that natural gas shortage of last year is now covered.
However, with continued price drop, DGAZ is likely to be affected.
Will Natural Gas Prices Continue To Decline?
VelocityShares 3X Inverse Natural Gas ETN linked to the S&P (NYSEARCA:DGAZ) are expected to see further drop in prices. Even as the prices are well below the average prices, analysts assume that the prices will continue to drop to reach to prices as low as $3.45mmBtu. At the same time there is expectation that by late October the price may go over another bump as winter sets in.
As per current trends indicated by government agencies, the storage would see a drop in July as well as August due to pressure of air conditioning. However, if the demand becomes lacklustre then natural gas is expected to feel the pressure.