Mike Norman, anchor, HardAssetsInvestor.com (Norman): Hello, everybody. It’s Mike Norman, your host. I am back for the second part of my interview with John Woods from Integrity Energy and over from the NYMEX.

In the last interview, you were talking about the curve of the market; the futures price is now higher relative to spot, which is sort of a forecast, I guess you could say, that down the road we’ll see higher prices.

John Woods, head of Integrity Energy (Woods): Right.

Norman: You also mentioned that we’ve had really quiet weather, which is very influential in the natural gas market. What if we have a big season now? What if we get another Katrina? I mean, could we go all the way back up there again, with the $14-$15?

Woods: Well, I don’t know about $14-$15. That has to happen if you have disruption, if you have platforms going down or destroyed. If we have any kind of weather, if you look across a map, you're saying, “All right, it is very hot here.” But you look over here to Chicago or New York, and it’s really mild. Chicago recorded one of its most mild Julys in, what, I think five, six years. So it’s pretty much offset.

And you just don’t have any storms out there. I mean, we had a couple, but they went up the East Coast. Made a lot of surfers happy. But, for the most part, there was no real disruption whatsoever.

Norman: Now, I know you deal a lot with the trade, the actual … the hedgers and the producers and people who are involved in the business of natural gas. Are they happy that the speculative element is not there in the size that it is, let’s say? Because I’ve spoken to other people who deal with folks in the trade and other commodities, and they're saying that all the speculation really distorted lots of things. And it was very hard for them to conduct their regular hedging activity.

Woods: Well, in any active market, you're going to get those speculators; it’s inevitable and there’s nothing you can do about it. You're just going to have to work around it. I mean, there’s not a perfect picture out there.

Does it disrupt it? Yeah, sure it does. But you're going to have to really just adhere to what they want to do.

Norman: In natural gas, do they have an ETF as they do with …

Woods: Oh, we have a fund out there; UNG ... it mirrors it. So, if you like natural gas higher, buy UNG.

Norman: Does it function in the same sense?

Woods: It’s pretty close to our spot, yeah.

Norman: But how do they take a position … by taking the futures position?

Woods: Yeah, the futures position. They’ll have their roll coming up, and they're just rolling their present position to, say, the next month or the month after. And that’s what you really have to look at. If they don’t do it the month right after, look at the third one. And then you’ve got a pretty good indicator.

Norman: But now, with the market in a contango, where we have the higher futures prices, that roll is a cost for anyone who’s buying nearby every month that they have to do that. Because people have asked me, who have had the oil ETF, how come they're not making any money when oil prices were going higher, and it incorporates that roll; cost is factored in.

Woods: Yeah.

Norman: So you’ve got to be careful about that.

Woods: Oh yeah, most definitely. You really do. But that just gets back to, you have to stick to what you believe in. If you're trading this, you have to know where you want to get in and where you want to get out.