MattB

Natural Gas: Clean Fuel with a Dirty Little Secret

Even if your analysis is correct (personally I think "massively less under-supplied" would be more accurate), what makes this secret (and I agree, it's not obvious to the lay-man) so dirty? Are you suggesting the natural gas price is artificially high, given your so-called massive oversupply? Why would a free market bear artificially high prices if there was a glut of nat gas in the pipelines? USA should be greatful that in this aspect of energy, it is almost independent, and not reliant on LNG to "fill the gap"; with the weak dollar correctly pointed out by fx.. and the rapid decline in domestic oil production, a short-term over-supply of gas ought to be cause for celebration (and continued investment) not crying the sky is falling.

While Natural Gas Production Increases, Company Stock Prices May Not

Sorry ... wishful thinking that Fayetteville extends into AL!
:-)

While Natural Gas Production Increases, Company Stock Prices May Not

"While none of this gas will be coming on-line overnight"?
There are 19 shale basins in the US being actively drilled right now. In its recent white paper on US Shale Gas, Halliburton estimated the recoverable reserves at 500-1000 TCF.
The play that broke open this resource was the Barnett Shale under Dallas/Fort Worth. Its easterly extension into Alabama - the Fayetteville Shale - came next. Now we're seeing the same technologies applied shale all over USA ... Bossier-Haynesville, Marcellus, Woodford, Lewis, Antrim, New Albany, etc.etc.
The largest gas companies in USA - alongside a slew of fast-growing independents - are heavily focused on drilling and producing these resources ... and there's plenty of gas already in the pipeline that originates from them: about 4.5% of US nat gas supply comes from the Barnett Shale!

Energy Stocks Are Too Cheap to Ignore - Barron's

Totally agree with the article ... most US-based energy stocks are trading at less than half their NAV, calculated at $90 oil/$9 nat gas (to answer jimmy's point).

Don't get distracted by the home heating issue (with due respect to folks in the NE). Over 70% of a barrel of crude goes into transportation fuel (~45% motor gas & ~25% diesel/jet fuel). Until the US significantly reduces its dependency on the car to get from home to work (years), switches the motor fleet to alternative fuels or engines (technology arriving but many years to switch), and finds an alternative way to move food and consumer goods from source to centers of population (railway resurgence?), the demand for oil is staying high.

Nat gas is a great alternative, especially for power generation. The floor for nat gas price is generally set by coal, which has also been coming down but is probably near bottom (not my area of expertise - anyone care to comment on where coal prices are headed?) The floor for oil is, in my opinion, set by international supply vs. demand (e.g. China, India) rather than US demand. Provided the global economy doesn't get too adversely affected by US woes, overall supply/demand stays tight and oil price stays $90+ (long term, today's dollar value on foreign exchange)

I'm sitting tight on my US oil and gas exploration and production stocks; painful to watch them tank the past few weeks, but hopeful they will rebound (at a more sensible pace, perhaps) over next 6-12 months ... and deliver 30-40% gains (my estimate, by mid next year).