Natural Gas turnaround

[daveking]

I'm doing some research on Natural Gas. The price of natural gas seems to be at an all time low.

Currently in Canada, natural gas is trading around $3 per whatever unit they trade at. NGX.com (http://www.ngx.com)

As we all know, crude OIL is making a comeback this summer. It was $30 a barrel a few months ago and now it is over $60 and many analyst are prediction $80 a barrel by August 2009.

I wouldn't be surprise if Natural Gas does the same. A few months from now it will be trading at $6.

Here is a snapshot of the US Market for Oil and Gas (http://www.wtrg.com/daily/oilandgasspot.html):

Currently there are two ETFs that track Natural Gas on the Toronto Stock Exchange. Claymore GAS.TO (http://www.google.com/finance?q=tse%3Agas) and HNU.TO (http://www.google.com/finance?q=HNU.TO) (Horizon Betapro 2x NG Bull.)

I don't recommend holding HNU for Long Term as it's a leveraged ETF which is reserved for short term day traders. Claymore gas hit it's 52week low last week at $6.72.

I am wondering what others are thinking about the price Natural Gas? Are you bullish as I am?

Disclosure: I own 400 shares of GAS.TO at $6.86. Holding it until next summer.

[CanadianCapitalist]

I don't invest in commodities directly but I've read that Natural Gas could be unusually cheap. I don't have an opinion on that but if it is true, wouldn't it be better to invest in Natural Gas producer such as Encana (ECA)?

Though it is possible that ECA hedges Natural Gas prices but sooner or later the lower priced hedges will run out.

[takingprofits]

The seasonality of natural gas is also an issue and my understanding is that prices usually rise in the spring - buy in January and sell in May.

With that in the back of my mind I have not been thinking about natural gas at this point.

[somecatchyprase]

I recently bought the Claymore Gas ETF (GAS) at $7.40.

A vital commodity is selling at, near, or below the cost of production, this puppy has nowhere to go but UP.

With the dramatic decline in drilling activity we’ve witnessed, it’s just a matter of waiting for stored inventory to deplete.

Looking for a double, possibly even a triple, at some point in 2010.

“ Ziff calls for shutting in gas to revive market: Vice-president says prices only half of costs”
Shaun Polczer, Calgary Herald, June 6, 2009

http://www.calgaryherald.com/business/Ziff+calls+shutting+revive+market/1668697/story.html


"Tertzakian: Shaky ground for natural gas"

http://www.calgaryherald.com/business/fp/Tertzakian+Shaky+ground+natural/1672564/story.html

[canadianbanks]

Have you though about the possibility of another major stock market crash and what that would do to energy markets?

[ethos1]

I'm doing some research on Natural Gas. The price of natural gas seems to be at an all time low.

I am wondering what others are thinking about the price Natural Gas? Are you bullish as I am?

Disclosure: I own 400 shares of GAS.TO at $6.86. Holding it until next summer.

on the NYSE symbol DIG

http://www.google.com/finance?q=dig

[daveking]

Actually, I think it would be better to be in commodity if there is another stock market crash.


Have you though about the possibility of another major stock market crash and what that would do to energy markets?

[mogul777]

Actually, I think it would be better to be in commodity if there is another stock market crash.

True enough. Not like the price of natural gas, which is primarily an HVAC fuel, goes up and down with the stock market. What you normally look at is the relationship to oil and here you will see it as undervalued.

Regarding Encana as you can see this stock has taken off with the rest of the market and really has little correlation with the price of natural gas eventhough that is a fair chunk of what Encana does. What can I say investors are by and large idiots. :rolleyes:

[somecatchyprase]

IMO, natural gas is so undervalued that it could do well even in a broad market decline.

My rationale for owning it is based on cost of production.

At present, there is a supply glut in natural gas. This will correct itself in time. In a few years, we could well have a supply glut in paper dollars, chasing nominal asset values higher.

Even if we’re entering an economic downturn far more serious than what the government and “green shoots” crowd would have us believe, there will always be some market for gas.

At the end of the day, the gas will stay in the ground, unless there’s a profit to be made in extracting it and bringing it to market.

As a final thought, can anyone name anything else that it still trading close to it’s 2008 low? I can't.

[somecatchyprase]

More on this topic from today's Globe and Mail:

http://www.theglobeandmail.com/video/bermans-view/article1173519/

[canadianbanks]

Actually, I think it would be better to be in commodity if there is another stock market crash.

I agree, however in the beginning of the crash it's likely that everything will go down, and you can buy at much lower levels.

[shepherd]

if the market falls so will resources and just as hard. just look at what the resources and resource stocks in the last bull market, they made all time highs.

how did oil, gas, base metal stocks, you can even throw gold in there, yes I owned yri and it hit 4 and change. they all went down even further than the market. the base metal stock got killed.agu went from 116 to 28, nxy 43 to 13, su 71 to 18. tck 45 to 3

natural gas need an economic recovery in the US growth probably of 3%+ do not see it coming, though maybe 2010. also the amount of new supply coming on and the amount in storage...believe it is dead money in 2009.

thanks
selkirk

[$1600 Gold by 2011]

Natural gas is a safe bet. With the coming inflation/fall of the US dollar, commodities will be the place to be. I prefer precious metals, oil and agriculture. Buy quality gold stocks now and watch them soar over the next few years. You won't see prices this low again for a while... after June/July.

[humble_pie]

thinking gassily, not really started buying yet.

low price is tempting ... but shephard has good point when he says gassy money is "dead money" for the rest of 2009. What if oil descends towards gas' level on a price/btu basis instead of the reverse.

apparently low north american gas price is related to huge oversupply plus cheap shale-derived gas coming onstream plus shipments of LNG commencing even in canada. Does anybody know whether that LNG carrier did land as scheduled at the brand-new LNG terminal in st. john's NB this past week.

i would not buy GAS. I would buy instead a gassy producer. I think there may be misconceptions about GAS and other commodity-based funds using short-term futures. GAS holds a one-month futures contract which matures and pays every 30 days. Funds then get reinvested in the next month's contract. So this means that every 30 days, or 12 times a year, this ETF gets rebalanced. In other words, gains are not cumulative. This feature will act as a slight arithmetic drag on the unit price IMO. To illustrate with a too-simplistic example, suppose natural gas rises at the same rate for one entire year. The ETF GAS will hiccup 12 times, rising a notch higher with each burp. (i have noticed that at present the mgrs are holding about 36% in cash, so cash management is one of the factors that will distort the 12 gassy belches.)

on the other hand, common stock in a quality gas producer will not get pegged back at frequent regular intervals, will rise exponentially if natural gas the commodity rises, is not subject to this numeric drag.

the double-leveraged gas ETF on the nymex is even more subject to short-term repegging. It gets rebalanced daily.

so far, my gassy potential picks include tristar, vero, encana. If i decide to light a fire in the sector.

[humble_pie]

gassing up last friday on bnn - Bill Harris of avenue investment sees gas inevitably bubbling up when renascent business revives demand for energy. Says nobody can predict when, so the time to start building a position in gas is now.

Harris tells bnn's howard green that investors need to "own something that will not go bust in the meantime" and should select low-cost producers with good balance sheets. He would be somewhat concerned about questerre (sorel & adirondack extension gas shales) ability to survive present earnings drought.

Harris' own big bet, he says, is progress energy.

anybody following progress PRQ, a corporation forged in january 2009 by merging 2 former unit trusts ?

[FrugalTrader]

So far for natural gas commodity plays: GAS.TO (single), HNU.TO (double) HUN.TO (single).

So far, for natural gas stock exposure: ECA.TO, VRO.TO. TOG.TO

Any others?

[humble_pie]

oh my, some are up 25% in 3 days ...

to add: Talisman (TLM tto & ny) & Questerre (QEC tto) for their Utica shale gas play. This is a major formation extending from upstate new york adirondacks through the lower st-lawrence basin past sorel towards levis, and some say even on to the gaspésie.

[FrugalTrader]

Looks like I'm 3 days too late!

[Andrew]

Any others?

I have recently taken a big position in TOT.TO (Total Energy). Average cost of $3.76

I also have exposure to CMT.TO (Compton Petroleum) which is also in the nat gas space. Compton is very risky, but has a lot of potential upside if it can restructure its debt. Trading at 0.22 P/B.

[dogcom]

I bought a position in the GAS ETF a week ago figuring we were getting close to a deep bottom. I also put in a bid for HNU last Thursday in that big selloff thinking that could be a bottom. I just missed by a few cents and would probably sell that position this week if I did get the bid due to the fact these types of ETF's are not to be held.

I could be wrong but I think the rally in natural gas has just started despite the fact there is alot of gas around.

[humble_pie]

frugal i don't think you're too late. Prices will subside after this burst of enthusiasm, plenty of time to get in later, nat gas is not a one-dog one-pony show.

i kinda like vero.

an all-time favourite is crescent point. What's not to like about cpg. The Bakken is a shale deposit but what i don't know yet is how much production is light sweet crude & how much is gas.

[colezy9]

frugal i don't think you're too late. Prices will subside after this burst of enthusiasm, plenty of time to get in later, nat gas is not a one-dog one-pony show.

i kinda like vero.

an all-time favourite is crescent point. What's not to like about cpg. The Bakken is a shale deposit but what i don't know yet is how much production is light sweet crude & how much is gas.

I can't give specific numbers but from what I understand, the majority of Crescent Point's production is light sweet crude with little amounts of gas. Altleast this is the case in Southeast Saskatchewan, I can't speak for other areas.

[humble_pie]

thank you colezy. Always good to know more esp about cpg.

andrew's compton pick is interesting given their $150 million new issue friday, packaged as $1.25 units containing one share and one 2-year warrant @ 1.55. Gigantic issue will dilute outstanding common by nearly doubling it.

will the proceeds serve to detoxify compton's huge debt debt problems ? Perhaps will serve only to postpone the reckoning day. It's worth noting that this issue follows a classic structure, one in which, as cmt itself notes in its prospectus page 18, two of the brokerage firms that are acting as underwriters in friday's issue are subsidiaries of two of its creditor banks. From Reuters news, these 2 have to be among BMO, BNS and TD. There's nothing wrong or illegal about this common arrangement, but the strategy does result, whenever it's successfully practiced, in offloading problem debts from the banks' own ledgers onto the shoulders - and into the purses - of the more gullible or risk-prone private investors who buy the new shares.

cmt has a bridge loan from the banks due june 2010, so this financing will give them breathing space for 9 months, following which they'll have to use the funds to repay the banks. Getting the $$$ on board at this point in time was smart, imho, since at the very least it will spare them the sudden-death-from-debt scenario that killed OIL.

that the issue sold out so quickly shows strong belief in the new compton management. Does anyone have a sense of granger's leadership style, in the upcoming watershed era for cmt his ability will be crucial.

[Murph]

Kicking myself right now for not buying some GAS.TO last week.

http://finance.yahoo.com/news/Natural-gas-prices-jump-13-apf-1751369025.html?x=0&.v=8

[humble_pie]

Reuters' Silha got it wrong on the day but his reportage may have mid-and-long-term merit:

ANALYSIS-US natgas 50-pct price rally likely to lose steam
5:38pm ET (Reuters)

By Joe Silha

NEW YORK, Sept 17 (Reuters) - U.S. natural gas prices, having bounced more than 50 percent since hitting a 7-1/2-year low earlier this month, may not have much higher to go in the near term as brimming inventories and weak demand leave the market oversupplied.

After sliding to $2.409 per million British thermal units in early September, the lowest level for a nearby natural gas contract on the New York Mercantile Exchange since March 2002, prices rebounded this week to the $3.70s.

"This is less a rally than a price recovery. The market was oversold below $3, and there's been a bunch of short covering, but gas is piling up in storage, and the recent lift in prices ignored that," said Pax Saunders, analyst at Gelber & Associates in Houston.

Natural gas traders, noting funds were carrying huge short positions, said news last week that the United States Natural Gas Fund , a long-only ETF, would issue new shares later this month and concerns that CME Group would tighten enforcement of NYMEX position limits, helped trigger the rush to cover, or buy back shorts, to lower total exposure.

Also, gas prices often rally in late summer or early autumn as traders anticipate stronger winter demand.

But some analysts expect this year to be different, with inventories at record highs, summer temperatures fading and a sluggish economy slowing gas use, particularly from industry which accounts for nearly 30 percent of total consumption.

"I don't think the market has any significant legs to the upside. We've very likely seen the bottom, but there's an awful lot of overhang in supply that should keep prices in check," said Chris Kostas, gas analyst at Energy Security Analysis Inc.

Analysts agree a lot depends on winter, a time when demand for gas to heat homes and businesses is at its peak.

SUPPLY GLUT

Domestic natural gas inventories will be heading into winter at all-time highs, and unless the heating season turns out cold, storage is likely to still be high this spring, which could limit expected price gains next year.

U.S. Energy Information Administration data showed total gas inventories climbed to 3.458 trillion cubic feet last week, and at current build rates, are probably just two weeks away from breaking the record of 3.565 tcf hit in 2007.

With seven weeks left in the stock building season, analysts expect storage to hit new highs above 3.8 tcf by November.

Inventories are a key source of supply that help utilities meet peak heating demand, and the huge cushion means there will be no supply shortfalls this winter.

The 75 percent slide in gas prices, since peaking last summer above $13, prompted steep cuts in drilling and helped slow production as few producers, if any, can make money at prices under $3. But most analysts agree the shut-ins so far have only modestly tightened the supply-demand balance.

"Production declines have not happened as quickly as we expected," ESAI's Kostas said.

While output is expected to decline further this and next year, analysts say even steeper cuts in demand, particularly from the industrial sector due to the recession, will make it difficult to balance the market until the economy recovers.

HIGHER PRICES NEXT YEAR

Despite the current supply glut, most analysts expect gas prices to improve later this year and next year.

Forward gas prices through 2010 are still hovering well above $5.50, reflecting first the expected increase in demand this winter, then further declines in production and some improvement in industrial use as the economy recovers in 2010.

But even with a tighter supply-demand balance next year, analysts generally agree huge reserves of gas should temper price gains.

"There is a flexibility of supply which means that prices next year will not go to the moon," said Jason Schenker at Prestige Economics, a Texas-based energy consultancy.

Analysts note some very prolific shale basins are located close to existing drilling and pipeline infrastructure and can easily be tapped if prices move back to the $4.50 or $5 level.

In addition, LNG, or liquefied natural gas, will again be a big wild card next year, with new production projects having the potential to flood the global market and drive more supply to U.S. shores.

"There's a lot of new LNG supply expected next year, which should help reduce any run up in prices," ESAI's Kostas said.

[mogul777]

That may be the most confused article I've ever read, lol. On the plus side I'm quite sure it covered all the possibilites while it was running in circles.

Yes it is different this time... I'm convinced the seasons will not change, supply and demand will not adjust, and "steeper" cuts will come as production slows during the recovery... and MJ will be the next president of the esteemed USA.

[humble_pie]

frugal did you manage to gas up during the runup. Or are you still waiting.

i had vero, encana, tristar. All sold now. Nice performance. Kept talisman.

waiting now for the Drop That Never Comes. There's a high inventory of gas. LNG coming into the ports. Lots of gas everywhere. No reason for these high prices. Still they stay high & higher.

usual story. Never an easy answer.

[FrugalTrader]

humble, no I didnt' jump into the natural gas run up (unfortunately). GAS.TO still looks interesting though technically speaking.

[humble_pie]

i was going to post about keep circling [the gas stations] until they drop the prices - last 2 days moving in that direction - when it occurred to me to wonder what effect all those electric cars & urban transit vehicles like cable tramways that we're probably going to get in next 10 years - what effect will such an electric powered fleet have on traditional gasoline demand ?

and what effect could this have on natural gas prices since in the lag effect, when oil becomes less expensive then commercial & residential consumption shifts slightly from nat gas to oil ... and demand for nat gas could then drop ...

one hears that lithium mining for the new vehicles' batteries has already come back to life.

[Jungle]

Anyone buying natural gas recently?

[$1600 Gold by 2011]

Gas is my second largest sector weighting now, after precious metals. Been accumulating good gas stocks recently and have a small call option position for January.

Gas looks good technically here. Look at any of the commodity etfs like gas.to or the more leveraged ones mentioned in this thread. The Oct. 25ish low is looking like a bottom to me but needs confirmation. As long as the low holds (not too far away so low risk here), good chance up we go for some months.

Also, many gassers are hedged well for 2010 but far fewer are hedged for 2011. So, unless prices recover a bit, production and exploration will drop like a rock come January.

[Jungle]

Gas is my second largest sector weighting now, after precious metals. Been accumulating good gas stocks recently and have a small call option position for January.

Gas looks good technically here. Look at any of the commodity etfs like gas.to or the more leveraged ones mentioned in this thread. The Oct. 25ish low is looking like a bottom to me but needs confirmation. As long as the low holds (not too far away so low risk here), good chance up we go for some months.

Also, many gassers are hedged well for 2010 but far fewer are hedged for 2011. So, unless prices recover a bit, production and exploration will drop like a rock come January.

I was looking at GAS.TO it's down 1.12% today. This etf was $32.15 Jun 2008 and now at $2.65. Wow. Even if you go in now and it drops another dollar, that's still a big loss.

[dogcom]

I was going to buy some Nat Gas this morning and would have flipped it already but my brokerage site is down. It is a really nice day on the west coast so I went on the roof and cleaned out my gutters.

I figure with winter getting close we should get a bit of a price spike before resuming the downtrend.

[Jungle]

I was going to buy some Nat Gas this morning and would have flipped it already but my brokerage site is down. It is a really nice day on the west coast so I went on the roof and cleaned out my gutters.

I figure with winter getting close we should get a bit of a price spike before resuming the downtrend.

You guys have like a mild spring :p!! (BC right?)

How come you think the downtrend will continue in Nat Gas? Too much supply?

[fatcat]

according to this article, we are bouncing off the floor ....

http://www.theglobeandmail.com/globe-investor/investment-ideas/an-argument-for-why-natural-gas-can-only-go-higher/article1786035/

i am tempted to buy some shares but from what i have read i should really put it in the lottery ticket allowance category and not actually call it investing

bmo tse:zjn has seen a nice rise since august 25 (12%) and tse:gas has stayed flat since that time

[$1600 Gold by 2011]

Yes, the downtrend is due to the oversupply. The extent of the downtrend will depend on how long the supply glut takes to work itself out.

I bought a first tranche of the infamous HNU today since I believe a multi-month bottom is in. I know I'm wrong if the Oct. 25ish low is broken so not a big downside.

[dogcom]

I completely agree with your view $1600 and I bought and sold HNU three times for profit since mid September. I think I may play it again and would have today if my stupid brokerage site wasn't down. I think Nat Gas is to be played and not held once again because of the oversupply and so on. HND will be the best play once after we get a nice rally and winter is almost over.

Jungle I live near the water in Richmond BC. And I also hope the above answered your questions.

[financeguru]

i'm also playing HNU and HOU....i got in a little early in HNU in my TFSA but also hold it in my non registered @ an average cost of $2.89...natural gas is rock bottom and i will average down if it falls but i too believe the bottom has been found.

The only question is that given the excess inventory, will this winter be any different than the previous ones. Seasonality is entranched in this one.

[dogcom]

Your right financeguru HNU is about playing so I am more inclined to play it the way $1600 suggests and will be out with a small loss if it closes below the Oct. 25ish low. I won't average down on this one because of the drag these funds have the longer you hold them.

[humble_pie]

dog i never did get much of the hang with these forward-contract things that drag.

what about gasfrac in canada or a double or triple option strategy in chesapeake usa ...

ok i'm a plodder ...

[dogcom]

I don't play options or futures but would like to one day learn how to properly use them. I just buy the ETF's I can simply buy off the stock exchange.

On the stocks themselves I may comment on them, but usually I stick once again to ETF's because I don't feel I can spend enough time looking over companies to purchase. Gasfrac though does seem like a good company with the way they can save money with their fracturing process.

[fatcat]

for a long term buy and hold

i wonder whether it is better to go with something like ZJN (BMO Junior Gas Producers which is up nicely in the last 3 mos or just buy GAS.TO and hold since it eliminates any of the risks of buying the companies ?

MIT has produced a very good strongly researched report on natural gas here: http://web.mit.edu/mitei/research/studies/naturalgas.html

it indicates huge supplies of shale that can dissipate fairly quickly

am i correct that the upside for natural gas is if we see an imbalance in supply versus demand ? ... then we are likely to see serious spikes ... in other words, is this a commodity that is difficult to deliver in a fairly consistent and stable way ?

[$1600 Gold by 2011]

Stick with stocks for long-term. See long-term chart of gas.to for what to expect from potential buy and hold returns.

Upside on both the supply and demand side, imo. Looking good today.

[fatcat]

Stick with stocks for long-term.
right, this is a good article that endorses that view:

http://www.barchart.com/etf/default.php?ref=natgas


This again highlights the fact that the trading of these instruments is tricky because of the big and variable impact of the roll yield.

[humble_pie]

1600 i am thinking about something like this in chesapeake. A diagonal call spread. CHK was 22.65. Buy jan 2013 10s, market was 12.80-13.95. I'd have put in a bid at 13.40, ready to increase to maximum 13.60. And sell april 2011 26s at something like .85, market was .84-.87.

the potential gain is capped at 16, although upward momentum could & would drive the formation above 16. The above cost would be 12.55 or less. This would be amortized down with each subsequent short term call option sale, for the remaining life of the strategy, which is just under 2.5 years.

it's actually a conservative income strategy. Far more lucrative if gas producer chesapeake rises would be a simple purchase of the LEAPs call. However, what's good about the above strategy is that it's decently hedged. Even if new york state outlaws gas drilling & CHK goes into the methane dump, a long $10 LEAPs call to cover means there will always be something short to sell.

[$1600 Gold by 2011]

The more complicated options strategies are down on my list of things to learn. Currently, I just use options to amplify my returns when I'm very confident in the direction of a trade.

[$1600 Gold by 2011]

Gas is my second largest sector weighting now, after precious metals. Been accumulating good gas stocks recently and have a small call option position for January.

Gas looks good technically here. Look at any of the commodity etfs like gas.to or the more leveraged ones mentioned in this thread. The Oct. 25ish low is looking like a bottom to me but needs confirmation. As long as the low holds (not too far away so low risk here), good chance up we go for some months.

Also, many gassers are hedged well for 2010 but far fewer are hedged for 2011. So, unless prices recover a bit, production and exploration will drop like a rock come January.

To track natural gas prices, go to stockcharts. com and type in $NATGAS. Gas has risen ~30% from the Oct. 25 low. It's now hit resistance and is hovering around the downtrend line from the past 12 months. Time for a swift move up or down. Place your bets!

[zylon]

Everywhere I go there is talk about the abundant supply of shale gas in North America, and that we can look forward to decades of cheap natural gas. The only source I've found that doesn't hold this view is this article from the Casey research energy team.

What do you think:
1/ is this article out to lunch?
2/ might now be the time to start building a long term position in natural gas and related securities?

http://www.caseyresearch.com/cdd/shale-gas-it-really-all
(second article down) Shale Gas – It Ain’t Everything They Said It Would Be

[hboy43]

Hi:

At some point the vastly lower cost of gas per unit energy will cause some vehicles, processes, industries etc. to switch to gas as the feedstock. Having gas at 1/3 or 1/4 the cost of oil on an energy basis can't go on forever.

hboy43

[zylon]

Natural Gas at $2.70 reminds me of Oil at $10 in 1998(?)

Two years later, in small town coffee shop:
"Yep, that was the time to buy" (when oil was 10; when gas was under 3)
"Well, why didn't you buy it then?"

"I didn't have the cash"
"My wife threatened to leave ... again"
"hahahaha!"
"Thought I had more time"
"Wasn't thinking"


http://www.dailyyonder.com/files/slideshow/Coffee/custom/ggoutside.jpg

[newbie]

I don't play options or futures but would like to one day learn how to properly use them. I just buy the ETF's I can simply buy off the stock exchange.

On the stocks themselves I may comment on them, but usually I stick once again to ETF's because I don't feel I can spend enough time looking over companies to purchase. Gasfrac though does seem like a good company with the way they can save money with their fracturing process.

u can short 2x leveraged etfs dog.
i luv shorting HNU on any rally.
HND is a contango lover :cool:

[Argonaut]

Natural gas is so cheap we could be powering the universe with it.

[zylon]

http://i39.tinypic.com/124gdvk.jpg

[zylon]

Not exactly sure why, but I find myself laughing out loud reading this article about Russian tanker Renda and US icebreaker Healy slowly making their way to Nome, Alaska.

http://www.alaskadispatch.com/article/update-renda-close-enough-taste-it

While we can't give our oil away or burn natgas fast enough; while movie stars and other bright lights are prepared to go to jail, at least for one day ("where's the camera?") to stop any pipeline construction, the Renda has been commissioned to transport heating oil and gasoline from Dutch Harbor to Nome.

http://iceagenow.info/wp-content/uploads/2012/01/Alaska-Icebreaker-Saga.jpg

[zylon]

Balmy break about to disappear in the gathering storm.

-30c on the Prairies early next week
-25c at Lakehead a few days later

Happy to have availability of blue flame.

http://web.ncf.ca/ek867/mcclintock.beineke.tents.jpg

image source (http://web.ncf.ca/ek867/2008_12_01-15_archives.html)

[KaeJS]

What is going on here? :eek:

http://www.wtrg.com/daily/ngfclose.gif

[Uranium101]

Natural Gas future nearing $2.50.
http://finance.sina.com.cn/money/future/NG/quote.shtml

[newbie]

What is going on here? :eek:

http://www.wtrg.com/daily/ngfclose.gif

this is what i am talking about.
this market is a very tough mkt K.
now just dont forget that the electronic trading started with a runaway gap, the pits will open tuesday only.
you were warned:cool:

[Eder]

Man I hate any gas producer but it looks like we are near NG capitulation and I don't want to miss this.

[newbie]

Man I hate any gas producer but it looks like we are near NG capitulation and I don't want to miss this.

what exactly are u trying to say here if u dont mind me asking u?
miss what?
TIA

[gibor]

Holy s$#@! Gas futures down another 4% :eek:

[KaeJS]

what exactly are u trying to say here if u dont mind me asking u?
miss what?
TIA


Definition of 'Capitulation'
When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling.

The term is a derived from a military term which refers to surrender.
Investopedia Says

Investopedia explains 'Capitulation'
After capitulation selling, it is thought that there are great bargains to be had. The belief is that everyone who wants to get out of a stock, for any reason (including forced selling due to margin calls), has sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that true capitulation is the sign of a bottom.

In simpler terms, he thinks this may be the bottom, or a good entry point, as he probably thinks the downside risk is limited.

[Argonaut]

It's not a stock, though. The more gas they find, the more they can sell.

[dogcom]

Going long Nat Gas is the same as shorting the overall market because the time window is so short to make gains. I have made gains buying HNU newbie on capitulation events but generally stay away from Nat Gas until something changes which it will some day because it is so cheap. If one wants to play it long now would be a good time to take a chance on it but don't hold it.

[newbie]

Going long Nat Gas is the same as shorting the overall market because the time window is so short to make gains. I have made gains buying HNU newbie on capitulation events but generally stay away from Nat Gas until something changes which it will some day because it is so cheap. If one wants to play it long now would be a good time to take a chance on it but don't hold it.

dog
i trade futures spreads on the Nymex , and short HNU.
that is it.

[dogcom]

Shorting HNU over the last few years has been one of the best trades to make.

[newbie]

Definition of 'Capitulation'
When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into less risky investments. True capitulation involves extremely high volume and sharp declines. It usually is indicated by panic selling.

The term is a derived from a military term which refers to surrender.
Investopedia Says

Investopedia explains 'Capitulation'
After capitulation selling, it is thought that there are great bargains to be had. The belief is that everyone who wants to get out of a stock, for any reason (including forced selling due to margin calls), has sold. The price should then, theoretically, reverse or bounce off the lows. In other words, some investors believe that true capitulation is the sign of a bottom.

In simpler terms, he thinks this may be the bottom, or a good entry point, as he probably thinks the downside risk is limited.

Hmmm
let me try to be polite to you youngling.
capitulation is when you see CAL 14 trading 14 cents lower with the pits closed .
the lowest i have ever seen in 4 years of trading this beast and most likely a 20 year low.
still cant grasp what EDEr is saying .
u have to refine the idea for me:cool:

[HaroldCrump]

As I witness the swooning prices of NG to historical lows - almost generational lows - all I can think of is just how deeply screwed the tax payers of Ontario are.
Shackled to long term contracts at some of the highest prices for alternative, "green" energy.
While the cheapest energy source in the world is being produced all around them.
The provincial debt and deficit mounts, and new taxes are being imposed to fund this alternative energy wet dream of the current govt.

[KaeJS]

http://finance.yahoo.com/news/Electric-plants-shift-coal-apf-1298912933.html?x=0

[KaeJS]

I still think NG will stay low for a while.

But I don't think it will stay low forever.

Thanks for the link, newbie

[newbie]

I still think NG will stay low for a while.

But I don't think it will stay low forever.

Thanks for the link, newbie

np

[newfoundlander61]

Well I am moving my cash TFSA holdings to the Claymore Natural Gas Commodity ETF and purchasing using the Pre-Authorized Cash Contribution Plan. Now that I have a plan, anyone know how to correctly set this up with CIBC. After looking around my account I didn't notice anything regarding PACC for this type of investment so does this need to be phoned in (being I selected and online broker i should be able to do this myself?). Maybe its hidden within the account somewhere, thanks for any tips on this.

[KaeJS]

Well, would you look at that!

NGG12.NYM Natural Gas Feb 12 $2.49 11:48PM EST
Up 0.00 (0.04%)

NatGas looks like it may have stopped falling off the cliff - for now :eek:

[newbie]

Well, would you look at that!

NGG12.NYM Natural Gas Feb 12 $2.49 11:48PM EST
Up 0.00 (0.04%)

NatGas looks like it may have stopped falling off the cliff - for now :eek:

K
the pits are closed
this is electronic trading.
there is more to it than the eye can see.
i am awake because i work 24/7 .
we have a report this thursday a.m.
which is bearish as it is.
ur trying to adjust ur stock purchase with NG price.
dont go that route.
i cant even trade spreads right now like i am used too after 2 days of carnage.
there just aint no volume.
wednesday is the strongets day on spot trading , after that if weather does not show any signs of bulishness at all , then.....
storage operators cant even find a tiny hole to cycle their inventory as it is.

[Chris.m]

we have a report this thursday a.m.
which is bearish as it is.
ur trying to adjust ur stock purchase with NG price.
dont go that route.
...
wednesday is the strongets day on spot trading , after that if weather does not show any signs of bulishness at all , then.....
storage operators cant even find a tiny hole to cycle their inventory as it is.

I'm quite new to this, and don't quite understand what your trying to say.

Which report is this?

Do you mean rationalize the stock purchase (of TLM) instead of adjust?

And are you saying that if Wednesday does not look good for NG then it will keep going down?

Again I'm sorry if these questions seem obvious to you, as they aren't to me.:o

[KaeJS]

NatGas at $2.54.

Up $0.05.

[KaeJS]

http://www.reuters.com/article/2012/01/18/bulgaria-shalegas-ban-idUSL6E8CH3X620120118?feedType=RSS&feedName=marketsNews&rpc=43

[newbie]

NatGas at $2.54.

Up $0.05.

K
i am going to spend precious time here with u now
pits close in 1 hour.
this is a short covering rally.
dont try and understand how the Nymex or the ICE trades
just do ur stocks.
GL
peace out :)

[doctrine]

I heard some predictions that Nat Gas could hit $1.xx this year

[Chris.m]

I heard some predictions that Nat Gas could hit $1.xx this year

More and more I am paying less attention to predictions that I hear. For every prediction that says it will go up another says it will go down. My personal opinion is that there are too many moving parts in some markets, and very few people can really grasp how they work. And those who do, probably don't give that knowledge away for free.


I took some advice from a book I read on Warren Buffet which said: Don't get caught up in the hype!

(I'm going long with TLM)

[doctrine]

I should be more accurate, I saw numbers at $1.0x not just $1.xx. Anyway, I'm not much of a speculator, but there is little doubt that eventually it will head higher, as consumption increases along with depletion.

Just don't expect the market to be rational about it anytime soon. The market can remain irrational for a long time.

[Betzy]

I also am long TLM and loving my HND for now:)

[newbie]

I'm quite new to this, and don't quite understand what your trying to say.

Which report is this?

Do you mean rationalize the stock purchase (of TLM) instead of adjust?

And are you saying that if Wednesday does not look good for NG then it will keep going down?

Again I'm sorry if these questions seem obvious to you, as they aren't to me.:o

Chris
sorry i have not replied.
this week has been very hectic.
i will try to point out some areas for u to try and understand when i get a chance.
just be aware that this is the most volatile mkt on earth, so word of caution , for this one u need a lot of reading before even trying to open a mini futures acct.
GL

[newbie]

I also am long TLM and loving my HND for now:)

if u trade horizons just one word of caution .
dont try to pick the bottom.
.
even though we have a gas on gas catastrophic event and the next 4 dollar handle is showing on cal 14 (Dec ) and the curve has flattened dramatically.
if prompt does not give up very soon, summer months will have a lot of trouble staying where they are now.
FWIW, Ng should be trading already below 2 bux, but it aint.
we need it now not later but it aint here ....yet.
not saying it will happen but ending storage season with at least 2.5 TCF on the ground is extremely bearish.
like i said this mkt is very complex and u have to know the effects of all the intrinsics atached to it.
this year is very virgin territory since way back then , hedging was present and contango was existent.
nowadays those factors are not here any longer.
GL:)

[Betzy]

Thanks newbie, yeah i do not ever try and pick the bottom on anything! Crystal ball is broken:) I have learned my lesson with HNU since i traded it for a while then lost when it started it's slide to lower low's. Then it split the wrong way, now it keeps posting 52 week low's. My only mistake was trading 1000 shares of HNU but I only bought 100 shares of HND.
I did get into HND at $9.68, it hit $30 yesterday. My stop keeps following closely for the sharp turn around...in 2014:)

[hboy43]

Hi:

Well here is one piece of new demand coming. The other day, Methanex announced they are going to move one of their 3 Chile plants to the USA.

hboy43

[newbie]

Hi:

Well here is one piece of new demand coming. The other day, Methanex announced they are going to move one of their 3 Chile plants to the USA.

hboy43

H
u r a long term holder and i am sure u r not worried with ur ECA.
that is what i think right?:cool:

[zylon]

I like a legal department that has a sense of humor. This is the standard disclaimer that Contango Oil & Gas Company (MCF) includes with their quarterly earnings reports:

Lawyer Stuff

The future is unknowable. We have good intentions but all of our projections and estimates will be wrong, and could be materially wrong. Wildcat exploration is expensive, speculative and potentially dangerous. An offshore spill or explosion would be enormously expensive. We have insurance but it may not be enough. You could lose your entire investment. Don’t be lazy – read our 10-Q’s, 10-K’s and press releases, and if you lose money – please no tears.

“Don’t forget about risk-free T-bills in your portfolio…After inflation and taxes you’ll likely only lose 5-10% of your investment.”

- Contango V.P. Investor Relations