Seeking Alpha

How best to take advantage if natural gas prices have turned the corner? Not the nat gas ETF...

How best to take advantage if natural gas prices have turned the corner? Not the nat gas ETF (UNG), which suffers high costs from rolling positions forward as contracts expire; E&P firms are high spenders, and low gas prices have prompted them to produce more higher-priced oil. The better choice could be power producers with high leverage to gas prices, such as NRG Energy (NRG), Liam Denning writes.
Comments (3)
  • Brian Bobbitt
    , contributor
    Comments (1905) | Send Message
     
    Good note, TPTB controlling UNG and other ETF's, like DRR Double shorting the E$, always has to be marked against the investor. Where is the rule that they cannot be marked up instead of down. I am going to take out my DRR and put it in EUO, which has less leverage, but more in line with reality.
    Boy, if someone can find a way to 'tweak' a price, they aren't shy. Watch out for those 3X ETF's

     

    Capt. Brian
    The Lost Navigator
    28 Nov 2012, 07:11 PM Reply Like
  • PalmDesertRat
    , contributor
    Comments (2938) | Send Message
     
    Do you mean to say by "turn the corner" that ng prices will increase from here?

     

    They've already more than doubled from the lows of last spring,and while they might go higher for a short time due to seasonal factors I don't think one can say "turn the corner" unless one means turning the corner to start back down again.

     

    Utilities have slowed their switch away from coal;in fact,some are going back to coal.

     

    I would argue that the next major change will be downward,esp after the winter heating season is over. which is only a few months from now. I would definitely not now be buying a consumer of gas such as a power company,nor would I buy an e&p at this point., In my own portfolio I've been a net seller of gas e&p's in the past few weeks.

     

    For those who want to be long gas,i think the ship has sailed (or the gas has leaked,to coin a metaphor). Better to stand aside until they drop again,which shouldn't be too far in the future.

     

    imho
    28 Nov 2012, 07:33 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2610) | Send Message
     
    Power producers also have to deal with falling electricity prices
    28 Nov 2012, 09:58 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector