Thursday, April 30, 2009

The Fall of Natural Gas

From Money Morning Australia:

This commodity seems to have an endless bearish trend. All the other commodities (oil, gold, base metals, agricultural) have more or less benefited from a renewal of risk appetite among investors and eventually prices rebounded after the lows posted everywhere in last December. Prices had declined so sharply in just a few months that it created investment and trading opportunities.

This scenario has been similar for all commodities, except one: natural gas....

...Natural gas prices have been traditionally positively correlated with oil prices, but a clear discrepancy has appeared in last February between the two energy futures.

Click to enlarge

Indeed, oil prices (red line) have rebounded from February 18 whereas natural gas prices continued their fall....MORE
Environmental Capital points to a story in today's Wall Street Journal:
...U.S. natural-gas production has gone from bust to boom in just a few short years, thanks above all to new finds in shale, reports the WSJ: “There’s no dry hole here.” The ample supplies give the country plenty of energy options, but in the meantime have helped send prices plummeting—and also make clean-energy less competitive....