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John Thomas graduated with a bachelor’s degree in biochemistry with honors and a minor in mathematics from the University of California at Los Angeles (U.C.L.A.) in 1974. He moved to Tokyo, Japan where he was employed by a medium-sized Japanese securities house. Thomas became fluent in Japanese... More
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  • Natural Gas: Time to Buy! 1 comment
    Apr 14, 2009 2:48 PM | about stocks: NGAS, NGS, CGC-OLD, CANL-OLD, FCG, DGAS, CHK, APA, DVN

    OK, enough is enough! Right here, at $3.60, is where you buy Natural Gas ($NATGAS)! After peaking at $13.50/btu last year, it has become the red headed step child of the energy complex, plunging a gut churning 74% to a low of $3.50. To see demand this weak coming out of a cold winter is nothing less than stunning. The credit crisis has forced US companies like Chesapeake Energy (NYSE:CHK) and Devon Energy (NYSE:DVN) to scale back exploration, so the US rig count has dropped by half. The price collapse is welcome news for consumers, as NG is an essential raw material for making naphtha, fertilizer, and plastics and accounts for 20% of US electric power generation. It also is a favored fuel of the green crowd, as the only products of its combustion are carbon dioxide and water. The industry was making the leap from a domestic industry to a global one just as the global recession punched it right between the eyes. The completion of six liquefaction plans in Qatar, Russia, Indonesia, and Yemen, costing $48 billion, is expected to boost global production by 25% this year, and more big plants are coming on stream in the near future. Below $3.50/btu the pick producers start shutting in supply, which will cause the glut to disappear rapidly. If I’m right, and those really are crocuses out there and not some florid hallucination, then it’s time to load the boat with NG.

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  • RiskReturnOptimizer
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    Comments (572) | Send Message
    Would you trade UNG or one of the Canadian Trusts (PGH, PWE)?
    14 Apr 2009, 08:12 PM Reply Like
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