Saturday, August 29, 2015
- Citigroup is touting notoriously volatile natural gas as a possible haven for investors weary of the market's wild swings.
- The U.S. gas market is "an oasis amid market turmoil," Citi's Anthony Yuen says - its supplies are cut off from overseas markets, and relatively steady demand comes largely from the need for heat and power; also, "the lower oil prices get and the worse that financing conditions for producers become, the better for gas prices."
- In the current bumpy environment for other commodities, gas’s isolation should appeal to investors looking for a calmer market, the firm says; gas has stayed at $2.50-$3.00/MMBtu since the spring, a far cry from the days when it could jump between $4 and $10 in a matter of months.
- Others are not so sure: "The volatility, when it comes in natural gas, it comes like no other asset class," says Oppenheimer's George Zivic. “It is by no means benign. It is just benign now, at the end of the summer, when we have a lot of supply."
- ETFs: UNG, UGAZ, DGAZ, BOIL, GAZ, FCG, GASL, KOLD, UNL, DCNG
- Berkshire Hathaway (BRK.A, BRK.B) discloses a $4.5B stake in Phillips 66 (NYSE:PSX), as Warren Buffett takes a renewed interest in the energy industry after appearing to pull back from the group.
- Berkshire holds nearly 58M shares after purchases this week, or more than 10% of the total outstanding, according to an SEC filing late Friday.
- Earlier this month, Berkshire did not disclose an investment in PSX at the end of Q2 but said it had omitted some data that was reported confidentially to the SEC, which sometimes allows companies to withhold information from the public to limit copycat investing while a firm is building or cutting a position.
- The most recent figure BRK had given for a PSX investment was a 7.5M-share stake at the end of Q1.
- PSX shares fell below $70 on Monday amid the broad selloff before rebounding to end the week at $77.23.
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