Natural Gas

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davefess
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Natural Gas

What are people's opinion of Natural Gas? I bough a long out of date call a month ago, just looking at oil and nat gas ratios and nat gas seems to have been depressed for awhile. I know supply is abundant but it was 3 yrs ago too.

Edited by admin on 11/08/2014 - 06:18

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tmosley
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I don't like natgas, but I do

I don't like natgas, but I do like producers.  If I played paper, I would probably own some.  Technology is advancing in this arena.  My own company is developing antimicrobial frack fluid to prevent infection by iron oxidizing bacteria.  It's a whole new world of energy production.

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thanks!

Yeah, I don't like natural gas as a commodity, but I thought it was due for a bounce. Been researching fracking and not at all liking that technique. Did read that some local governments in Texas may be putting a temporary ban on fracking because so much water is required and they are in a deep drought. Good luck with your company!

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Jim
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I've been following natty for

I've been following natty for the better part of a year now.  My charts say bullish, but boy it's a tough market to be long in.  I'd like to poast some natty charts, nut can't figure out how to do it.  I'd love to see this thread get active.  If someone could help me with the chart posting function, I'll do it.

P.S.  Helluva bad day for natty bulls.

Wizdum
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bought some CQP in the flash

bought some CQP in the flash crash...
rode divys

​sticking with

prana
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Underwater view

davefess wrote:

I bougth a long out of date call a month ago....

Me too Dave. We'll snorkel for a bit.

davefess
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breakout coming?

It just seems like it is ready to break out. Maybe after this sell off and stimulus announcement? I have watched the Nov contract hit 5 then back down to 4.5 twice now, ready for it to surge at some point. It has been sideways for awhile.

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davefess
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article on nat gas

http://seekingalpha.com/article/275413-natural-gas-cheapest-asset-won-t-stay-that-way-for-long

i know there is a bill in committee right now from that boone pickens is lobbying for to subsidize nat gas vehicles. I am against subsidies but this would greatly increase demand for nat gas I would assume.

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I think providing an opinion

I think providing an opinion on holding a natgas position would depend on the length of the holding right ?

I mean a 6 week position would have a different opinion than a 20 year position right ?

I bought the ETF last week and plan to hold it for years even a decade err decades. Then again maybe the whole rotten system comes falling down and I am out the money (lucky I stacked the physical shiny stuff already)

I have read that the actual "stuff" isn't very sexy nor profitable but I can tell you from living in Asia for the better part of a decade that its becoming very popular as a source of energy. My town of 400K has 3 companies ready to supply your house within a fortnight. With a new facility coming online in Sahkalin complete with LNG portage I think its a winning formula.

Nuclear maybe the ultimate contrarian position at this point and oil is already well established. I think natgas has a ton of upside but am willing to admit I am new to the game and hoping to learn more at places like this one.

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I agree

and I thought buying a fall contract I would be ok for a breakout this year, but I am going to keep going long. possibly 2013 contract or something.

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Eric Original
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How about the old trusts?

What do you guys think of the old trusts that are still around like SJT, HGT, SBR, etc??

Safe play for a little dividend action while nattygas ticks higher?

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I have Conoco Philips,

I have Conoco Philips, Chesapeake and PMT.TO. Conoco and Chesapeake has been good for me but PMT is really disappointing. For me this is a sector to be in for the coming 10-20 years, but not a sector I prefer. I just bought a few shares in the sector because if NatGas is suddenly around 10$ I would just kick myself not investing in it when it was around 4$.

I used to have HGT and wish I could trade it now for my PMT shares because it's a better dividend/nat gas play than PMT.

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I'm Super Super Bullish on

I'm Super Super Bullish on nat gas.  At around the $4.20 range it was very obvious to me it was gonna sky rocket to $5. 

We're having a bit of a consolidation right now because the big boys know to stay away from Industrial commodities. I was warning people on turd's former blog to stay away from them. Demand is down, it's really simple.

I am hoping to see natural gas go down to $4.20 or less, if it does, I will be very very tempted to be as aggressive as possible with some natural gas futures/UNG options.

I'd say natural gas is a better play than oil, and that's still considering my $150-$200 oil projection over the next year and a half.

I can see Natural gas at $10-12 by then.  As currencies (especially the USD go down) we will see major major money going into all of these commodities. 

Hope that helps.

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donpaulo
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I will continue to acquire

I will continue to acquire more nat gas assets over the coming months. I am in no rush to make quick profits nor do I need to turn over a position I feel has a winning strategic trend.

Nat gas supply is up ? Prices are down ? and its trending towards a larger share of the energy pie ? What's not to like long term ?

edit, I think that if one considers the Asian market then its an even stronger play. In Japan alone natgas has gone from 10% of the market in 1988 to almost 14% in 2001. Meanwhile the J economy scrolls sideways or downwards yet gas continues to carve out a larger portion of the energy sector.

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Yes Don, Japan is a major

Yes Don, Japan is a major factor.  They have upped the nat gas imports by 10% this year due to the nuclear incident.  The 3rd biggest economy in the world loading up on natural gas = bullish for natty!

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Jim
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seasonals

Daedalus Mugged
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US Nat Gas is not a global commodity

Quote:
As currencies (especially the USD go down) we will see major major money going into all of these commodities. 

That is actually the reason I don't particularly like NG.  All the other commodities we talk about, PMs, copper, grains, oil etc are fundamentally global commodities.  Nat Gas is not, at least for North Americans.  The US price of Nat Gas is set by US supply and US demand (plus imports from the 51st state).  If the dollar tanks (loses reserve status), the price of oil in dollars goes through the roof, because the dollar is only on one side of the transaction.  The middle east sheikhs want stuff, and dollars won't get them as much stuff.  However, Nat Gas has dollars on both sides of the equation...the cost to drill for more is in USD, and the price is in USD.   

There is very minor capacity to export domestic NG, and thus very minor capacity to get paid in anything other than dollars.  What LNG facilities the US has is to serve as a dumping ground for cheap international gas off season to take advantage of our storage capabilities. 

The price of NG would increase with inflation/dollar devaluation, but not the magnitude I think you would see with global commodities.  Fundamentally, my commodities bet is a bet against the dollar.  NG doesn't work for that.

My view only, you may turn out right. 

What would change my view:  Massive expansion of LNG exportation facilities (very unlikely) or a massive increase in CNG (compressed NG) and plug in electric vehicles in the US market (probable, but not soon).  Right now there is really no fuel switching capability between liquid fuels and NG (there used to be, primarily in electricity production, but oil fired units never run anymore).  The vehicle market could cause a massive energy shift from liquid to gas fuels, and could restore the link between domestic (NG) and international (oil/gasoline) prices via large demand shift.  I think this shift to more domestically driven transportation energy consumption will be one of the responses to significant dollar decreases...I don't think it will happen before the crisis, but be more of a response to it. 

This view is relevent to US domestic NG plays.  Does not apply to international plays (like the Aussies exporting to Japan) with access to large scale LNG exportation capabilities. 

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Natural Gas Bearish Chart

Daedalus:  Interesting fundamental perspective.  I would add that some would argue that the US is sitting on a gigantic field of natural gas that could supply all of our energy needs for 100 years.  In other words, there's a glut of natty. 

I'd like to present a couple of technical analysis scenarios, one bearish, one bullish.  First off, the bearish scenarion that fits with your fundamental analysis.

It could be argued that natty has been forming a bear flag since March of this year.  According to the textbooks, when prices break of the lower edge of the flag, look for a continuation of the trend and expect the next down move to be the same length as the flagpole. Using UNG as a natty proxy, here's the chart:

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Natural Gas Bullish Chart

Here's a chart that might argue for a bullish oultlook for natty longer term.  In this chart I put my Elliott Wave interpretation of a **POSSIBLE** wave count that would call for a bullish wave 3 sometime in the next few months.  Again using UNG as a natty proxy, I've labelled what could be the wave count setting up in UNG. Essentially, the argument that this is an irregular wave 2 forming to the downside which could stop here or could go all the way down to retest the March lows just to clean out the weak hands.

Jim
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Natural Gas Bullish Chart

Here's a chart that might argue for a bullish oultlook for natty longer term.  In this chart I put my Elliott Wave interpretation of a **POSSIBLE** wave count that would call for a bullish wave 3 sometime in the next few months.  Again using UNG as a natty proxy, I've labelled what could be the wave count setting up in UNG. Essentially, the argument that this is an irregular wave 2 forming to the downside which could stop here or could go all the way down to retest the March lows just to clean out the weak hands.

Jim
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sorry for the 2 posts.

Sorry for the duplicate posts.  Can't seem to undue it

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