John Lounsbury

Fadel Gheit: Oil Prices to Remain Inflated but Don't Pass on Gas

H.T. Love - - -

Thanks for such a comprehensive review of nat gas fundamentals. You provided much more depth than I had gotten to on my own. I have taken the UNG position as a trading opportunity, not an investment. I admit that I could have tried to take advantage of the contract roll-over price impact and did not.

I am aware that you have written extensively on nat gas. May I suggest that you consider writing a monthly analysis of the market? You might chose to time the articles around the monthly futures contract roll over dates, either just before or just after.

Fadel Gheit: Oil Prices to Remain Inflated but Don't Pass on Gas

Michael F. - - -

My comment reply to Ferdinand E. Banks notwithstanding, I find your arguments compelling. I would say that your projections should be considered not a case of "if", but "when". I am looking at the short-term scenario and am long on nat gas for the next several months. If the recovery sputters, there is a flight to safety and oil prices decline, my trade will suffer. However, when you look at the cost per btu, the oil/nat gas price ratio is way out of whack (greater than 3/1).

As Pickens says in the quote you presented: "...we're *stupid* not to use natural gas in the transportation sector."

My observation is, why should we be any different regarding nat gas and transportation than so many other places you look? (RE - stupidity)


On Oct 09 10:53 AM Michael Fitzsimmons wrote:

> to say that oil isn't trading on fundamentals after 2008's supply/demand
> thin margin, an oil war in iraq that took millions off the margin
> (and added a geopolitical risk that has not gone away), the current
> iranian crisis, and the fact that china is circling the globe locking
> up oil deliveries well into the future, is simply putting one's head
> in the sand. with all due respect to mr. gheit, he is overstated
> the role of financial manipulation. the fact is, all the issues i
> listed above will continue to firm foundation under oil, and if the
> world economy ever begins to function "normally" again, you'll see
> oil prices zoom higher and eclipse the $147/barrel high very easily
> - especially when you consider that oil is priced in U.S. dollars,
> and we've all witnessed where that is going. at the same time, the
> U.S. is awash in natural gas, and as pickens said on CNBC the other
> day, we're *stupid* not to use natural gas in the transportation
> sector.

Fadel Gheit: Oil Prices to Remain Inflated but Don't Pass on Gas

Dr. Banks - - -

Look at the 15 month chart for UNG. When I see a trend like that (straight as an arrow from over $60 to $9.01on Sept. 3), it makes my contrarian blood boil. Any commodity that loses 86% in 15 months gets my attention. Now, the close on Friday was $11.81, up 31% from Sept. 3, but still down 81% from July, 2008. Simply looking at the oil/nat gas price ratio (which is not reliable to do rigorously, as the author has cautioned in the article), UNG could well be around $30 +/- right now.

I know from your past comments that you are not a big fan of traders and technical analysis, but I hope you will allow me the liberty of disagreeing with you on such grounds. And, for one little fundamental creeping in for consideration, we are going into winter in the northern hemisphere. That is when demand for nat gas increases seasonally.

So, I respectfully take the opposing view to you and support Mr. Gheit. I bought UNG a couple of weeks ago and put it in my contrarian portfolio for the autumn at TheStreet.com (www.thestreet.com/stor...) and (www.thestreet.com/stor...)

By the way, glad to see your comment here. I always enjoy reading your comments, whether I agree or disagree, and have not seen you for a while.


On Oct 10 09:09 AM Ferdinand E. Banks wrote:

> Interesting interview, but full of holes. I'm still not sure that
> Michael F. is right about gas, but he has more on the ball than Mr
> Gheit.

Fadel Gheit: Oil Prices to Remain Inflated but Don't Pass on Gas

L4D - - -

Pardon my attempt at humor - I'm glad you proofread your comment and inserted the two letter word in your title quote.


On Oct 09 02:52 PM Living4Dividends wrote:

> Great interview.
>
> How could I pass up a title like "Don't Pass on Gas" ???

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