Saturday, March 3, 2012

Natural Gas

Natural gas plays are good longer-term investments right now.  I don't like the extreme short-term, simply because gluts like this take time to work out, but eventually these are going higher.  The simple law of supply and demand will see to that.  Due to the obscenely low cost of natural gas, many producers are shutting down or not starting new wells.  Plus, the low cost is creating demand, such as in vehicles, where none existed before.  A good estimate of where natural gas has to go before supply starts recovering is $4.  Simply put, the price of natural gas would have to double for it to become sustainable.

The ETF plays are UNG and UNL.  I will do charts of stocks as they become interesting.

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