For those of you getting the email subscription to Indexology, you’ll need to click through to see this entertaining picture of a cold but smart cow. Although most use natural gas for their heating source, she chose unleaded gasoline – and I might add in style.
Natural gas had a rip-roaring comeback in the past two months to end 2013 as one of the biggest winners in the commodity indices, gaining 9.2% and 5.0% in the S&P GSCI and DJ-UBS CI, respectively. After natural gas gained almost 30% by April from cold weather and high electric power sector demand due to higher costs of coal burning from stricter environmental rules, it gave back all of its gains over the summer from the warmer weather. In May, it had its biggest lost since August 2012, by June gave up its entire 2013 gain and logged a loss of 6.4% by October. See the chart below for monthly performance and notice the backwardation showing in the last month: