JCC

Rough Times Ahead for Natural Gas

Interesting to read this article and the various comments. Natural gas is down, because supply is up dramatically. We found that when we tried to extract shale oil, we did not get much oil, but we ended up with a lot of natural gas. So with the increased supply and the fact that there is plenty more to extract prices will be down until we increase usage.

This of course has changed the equation, and it makes a lot of sense to start a gradual shift to using LNG as a transporation fuel. This would dramatically reduce oil imports, and we would be burning a cleaner fuel. This makes so much sense, that I am hopeful that the markets will eventually lead us in this direction.

Surprising Upturn for the Energy Sector

A month ago I surmised that we would start to see positive movement in equiities in the following sequence:
1. Financials - I purchased and the results so far have been great. They are going up.
2. Resources - The logic is that as recovery takes place more resources will be required. This includes energy.
3. Industrials - I expect these to take a lot longer because of all of the economic damage.

Well financials are rocket-shipping, and they have a ways to go. With all of the worldwide reaction to the monetary crisis, carefully chosen financials are a great investment.

Resources have just started to move. Volatility will be here for a while, and then chosen commodities will rocket-ship.

We are witnessing natural reactions to the economic cycle, and it is a great time to be an investor.