One natural gas buy for winter. . . And one investment pitfall
Picking your next natural gas play isn’t so easy anymore. . . Or is it?
Back in march, we saw the initial real buying prospect for oil and gas stocks. At the time, nearly every one i ran into was in the trenches. Each company was either at or approaching a 52-week low. I was not kidding when I suggested that these stocks were a screaming buy. Nearly all of you consorted. Since then, energy stocks have taken off. And i’m not discussing a number of gains here or there. . .
Regrettably, not every one consorted.
I remember one reader in particular who does not pull any punches. Yet after asking him whether or not he was taking vantage of that buying prospect, he adamantly refused.
His reason?
He was too frighted to sell.
At this point, probably looking for a Delorean and a ray of light – flux capacitor and everyone.
Whether or not you were on board with us at the time, you made an absolute killing with your energy trades.
But let’s face it: to my readers should not hesitate to look back with regret. And this gentleman comes to mind because he not long back sent me an e-mail. This time, however, he was fewer cynical when asking how i felt with regards to getting back into natural gas.
And you ought to be able to guess what my sentiment on the matter was in my e-mail, and is today, as i write this. . .
U. S. Natural gas
Few weeks back, baker hughes inc. Reported the number of oil and gas rigs operating in the u. S. Has increased to 1,069. Whether or not you’re holding track, that’s 21 more rigs than the former week. This compares with 1,600 drilling platforms in September 2008.
On the other hand, whether or not there were that numerous rigs operating right now, i’d be more than worried. And one glance at the most up-to-date eia natural gas storage report would have you worried, too. . .
The last increase of 25 BCF gas puts our work in the underground storage BCF 3759. Though natural gas is presently selling around $5/mcf, we’re still a far cry from 2008 price levels.
Don’t worry, we’re not holding our breath for natural gas costing $14/mcf anytime soon.
Once the cold weather kicks in, persons will start turning the heat on and up. It may not be the massive demand spike the bulls would love to see, but couple the heating season with more industrial demand and prices could without apparent effort reach $6/mcf.
Natural gas selling
So where to look when laying out capital?
It’s no mystery that we’re sticking with what works. The clear winners are the respective works of slate, in the case of North American natural gas market. Make no mistake, we’re going to tap those resources. I’ve reiterated the importance of shale gas a heap of times again.
It makes sense, too.
After all, it’s due to these shale basins that we can keep a positive outlook for u. S. Natural gas production.
Your next shale play. . . And the etf to refrain from
This natural gas stock isn’t an astonishment.
As stated by range’s ceo, john pinkerton: “the fuhrman mascho sale continues, coupled with our operating cash flow, must more than fund our 2009 capital spending program. “
The company still expects to drill 20 additional horizontal wells in the Marcellus shale before the end of the year.
Keep an eye on this one.
Naturally, there are numerous investment pitfalls.
With regards to the united states natural gas fund (nyse: ung), i can’t assist but side with my readers. You see, it didn’t take very long for you to express your concern after the last time i brought up ung. This ETF invests in the coming months contracts on the NYMEX natural gas that are expiring.
The problem is that we’re not going to see the same price shock that we did in 2008. The downside to the unconventional boom is the big quantity of supply. Add the weaker demand we’re experiencing, and a price spike is plainly impossible.
Shale profits
I’ll let you make your own call on this one. Personally, i’d stick with our shale plays. And whether or not you’re looking for even better natural gas plays, feel free to check out our free report under.
The good news is that nearly all of my readers have prior to the specified or implied time traditionalistic their natural gas positions from the $20 trillion report. In fact, they are still holding on to gains despite last week’s settlement. Whether or not you’re fascinated in sharing their success, feel free to check our free natural gas report. Whether or not you haven’t yet. . . I don’t acknowledge what you’re waiting for.
A year from now, i don’t want you looking back with regret.
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