Long Term Natural Gas Price in Uptrend

Commodity markets signal a brighter future for buy recommendations Encana (ECA), ConocoPhillips (COP) and Devon Energy (DVN), the first, second and third largest North American natural gas producers by volume. The latest weekly price in our tally of the average monthly futures price for natural gas for the next six years at $7.18 has edged above the latest 40-week average, thereby reversing a ten-month downtrend by that measure.

Ironically, the symbolic indicator of bullish future conditions arises as Encana told investors at the Canadian Association of Petroleum Producers conference in Calgary on June 15 that it may reduce natural gas production as a result of low price.

Originally published on June 16, 2009.

Comments

[Jimbo:]

If Energy Secretary Chu can overcome his "agnosticism" re natural gas, we may find that natural gas may help us reduce carbon(for whatever that is worth) and greatly reduce our balance of payments problem.

Jul 08 11:22 AM

[Fred W:]

Short term prices are shockingly low when compared with the historical oil/NG price ratios.

Jul 08 12:03 PM

[prairiedog555:]

Nat gas is the only "reality" answer to the foreign oil dilemma. Why are the Dems not getting behind it? I guess they are committed to wind and solar and don't care that they do not make sense at this time.
I don't trust the Republicans because they are thieves, but I distrust the Dems more because they are hypocrites.

Jul 08 12:19 PM

[LoveShorting:]

Thanks to author and all 3 commenters for COMMON SENSE.
Chu is either stupid (unlikely for a Nobel prize winner) or more
likely, lacking in the term above in capital letters. Hey Chu,
WAKE UP ! (you are in a position to help america for the love of God)

disclosure - - LONG UNG and will be for a long time.

Jul 08 02:33 PM

[Mad Hedge F...:]

Where? Where? You may recall my advice to abandon natural gas at $4.30 in the face of giant new discoveries in shale formations (see “Cash out here at $4.30) and “Huge Discoveries . Since then, the Midwest has suffered its wettest spring since 1871. It rained 25 inches in Chicago the first half of the year, drowning golf courses, and sending the mosquito population exploding to Biblical plague proportions. Let me assure you, I have absolutely no ability to predict the weather, except that my combat scars itch when a storm is coming. Cold weather means no air conditioning, which means cratering natural gas demand and a new two month low of $3.37. But when you see a parallel contract like crude soar to new heights, and NG fail a half dozen times to get off a five year low, you know rough weather is coming. The crude/gas ratio players really got carried out in body bags on this one, as one record after another was shattered, taking it to a stunning 19.4:1. Natural gas has been the worst performing investment this year, the ETF (UNG) falling a mind blowing 54% since January. Best to wait for natural gas to find its new, lower, range before entertaining a position.

Jul 08 02:46 PM