Natural Gas Trades Low Compared to Oil (OGZPF, DVN, APC, SJT)

Record natural gas price in the U.K. symbolizes the apparent opportunity in buy recommendations Gazprom (OGZPF), Devon Energy (DVN), Anadarko (APC) and holdrated San Juan Basin Royalty Trust (SJT) among producers in our research coverage.

Bloomberg reports that the within-day price for natural gas at the National Balancing Point rose as high as 255 pence per therm, or about $44 a million btu. A record daily price carries over to one-year futures in the U.K. that are more than $11 a million btu compared to about $8.62 in the U.S. Cold weather in Europe has stimulated demand at a time of supply difficulties.

Ultimately global prices are linked by trade in liquefied natural gas. Contrasting warm weather in the U.S. has contributed to natural gas trading at the low end of a normal range with oil in North America. By implication, natural gas stocks also may be trading at the low end of a range compared to oil. Meanwhile, oil appears to be continuing its march to our vision of $150 a barrel in 2010.

Kurt Wulff's McDep Associates offers realtime, independent research services for investors in the energy and utilities sectors. For more information, go to www.mcdep.com or email Mr. Wulff at [e-mail].