Monday, August 17, 2009

No Respect? Cheap Natural Gas Draws Political Crowd

From Environmental Capital:
Never mind being the Rodney Dangerfield of fuels—natural gas is starting to seem like the punch line to a bad joke: “Natural gas is so cheap…

But seriously, folks, natural gas futures fell another 43.6 cents last week to $3.24 per million British thermal units. That’s the lowest gas has traded since Reese Witherspoon’s “Sweet Home Alabama” was in theaters (that was 2002, back when Enron was still falling, but not fallen.)

Gas is down 11% in August, 42% on the year and 69% from this time a year ago. For comparison, oil is down just 41% from this time last year, and is up 51% in 2009.

There’s no mystery as to what’s behind natural gas’s continued free-fall: surging supplies (think, Haynesville Shale) and anemic demand (the recession). Neither shows any signs of a quick fix. Most natural-gas producers are actually on track to beat production targets despite reduced drilling, and the Energy Information Administration expects U.S. gas demand to fall 2.6% this year. Many experts expect gas storage, already 20% above normal, to fill up by the fall....MORE

I wonder how these guys are doing (June 5, '08):
Centaurus, Carlyle Carve Gas Caverns as Traders Bet Prices Rise
That's not to say we wereimmune to the allure, we just had the idea earlier:

Investing in Natural Gas
Natural gas futures are down.
The September contract is trading at $5.82 down 21 cents.
The January '08 was $8.20. If you know anyone with (large) gas storage capacity (besides Uncle Dave on a fishing trip) drop me a line.

In September of last year Jim Rogers said "...But secondly, buy natural gas, you'll make a fortune"
I'm thinking:
a) he was early and
b) the only way to "make a fortune" is to discover a field under Berlin.
Now don't go drilling under Humboldt U.
And definitely don't tell 'em Climateer sent ya.