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Cheap natural gas and increasingly competitive labor costs are bringing factories and jobs back...

Cheap natural gas and increasingly competitive labor costs are bringing factories and jobs back to the U.S., Barron's says in identifying eight stocks it believes should prosper - particularly chemical producers and steelmakers - in a gas-fueled manufacturing upswing: SWN, LYB, NUE, DOV, CPN, CF, WMB, UNP.
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Comments (4)
  • Michael Bryant
    , contributor
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    If prospering on cheap natural gas, (RNF) works well. If better on natural gas' rise, try (LNG).
    28 Jan 2013, 08:56 PM Reply Like
  • cgm
    , contributor
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    LNG does better with cheap NG. It will benefit from export of NG. the lower the price, the more export demand.
    28 Jan 2013, 11:55 PM Reply Like
  • kmi
    , contributor
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    If I remember correctly, (LNG) contracts stipulate fixed volume of sales, and price is conditioned on what (http://bit.ly/rmHAbP) itself pays. It doesn't look like LNG will either make more with a lower NG price, or less with a higher NG price. The ones who most stand to benefit are the overseas entities who gain access to cheap US energy.

     

    Someone correct me if I am wrong.

     

    If LNG/NG growth expands significantly overseas, like it looks like it will, the buyers of Cheniere's LNG will get hurt since their contracts are take-or-pay: "they will pay Cheniere’s fixed cost component whether or not they actually take the gas." Cheniere's benefit is that "buyers will pay Cheniere 115% of the cost of the gas acquired on their behalf to cover fuel and operating expense."

     

    So, Cheniere's spread is what... that 15%? Does Cheniere engage in any production of NG itself? I don't know, but if it does maybe there's some more meat on the bone there.

     

    I'm not all that impressed with (LNG) and the export deals, especially inasmuch as the business model trades increased domestic energy costs to send cheap US energy overseas, effectively having the domestic economy subsidize its overseas competition.
    29 Jan 2013, 07:23 AM Reply Like
  • huoi
    , contributor
    Comment (1) | Send Message
     
    yes, i do agree go long with (lng).
    29 Jan 2013, 01:08 AM Reply Like
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