Natural Gas

[greenhoney]

if im not mistaken, the etf for this is UNG.

[winston]

THIS IS STILL OUR FAVORITE COMMODITY

We've spent most of our "ink" over the past three months detailing how the government's giant "E-Z-Credit" program is pushing up the price of nearly every asset imaginable.

This makes life difficult for the contrarian trader, who looks for cheap, beaten-down assets to buy. One of the few ideas we can provide you is (still) check out natural gas.

Natural gas is a vital fuel that heats our homes and powers electrical plants. It also trades in a ratio to its energy cousin, crude oil. Sometimes oil gets cheap relative to gas. Sometimes gas gets cheap relative to oil. Last year, due to a big glut of new gas supply, this oil/gas ratio hit an extreme "boiling point" reading of 24:1. This is a super-cheap gas reading.

Today's chart shows that, while the 24:1 reading has backed off the burner a bit, it's still at 22:1. Sure… we know natural gas supplies are high right now. But we also know buying during a glut – when you can get assets on the cheap – is the only way to make big money in the commodity markets. "Natty" is still a buy.


Source: www.dailywealth.com

[Aspellian]

Yes. Shale Gas is now only beginning but its impact could be huge. many N.American ang-mohs are now trying to get into Europe/China to do explorations. New technologies are really increasing the gas reserves by leaps and bounds. US from net importer may even become exporter. Canada will be affected as its main gas export market is USA.

Russia are pushing back its LNG plans on its east coast. If Europe also has significant shale gas, then their dependence on Gazprom will be reduce, which means Russia's GDP will be affected. There could be a real shift in balance of power.

I went for a event today and the guy from a oil major giving the talk mentioned that Shale Gas in Europe is dying down as the structural plays over there is different from USA (after the big hype few months back).

LNG will be a bigger thing in future with Asia (China as net importer) and Europe the key import markets.

[winston]

Natural Gas Pops While Most Everything Else Drops

As stocks and oil have moved lower over the past few weeks, natural gas has made a significant breakout from a multi-month trading range. As shown in our trading range charts below (green shading is two standard deviations above and below the 50-day moving average), natural gas has moved sharply higher in recent days as oil remains stuck at the bottom of its range.

Who knew natural gas would join gold as a safe haven during these troubling times?

http://www.bespokeinvest.com/thinkbig/2 ... drops.html

[kennynah]

Who knew natural gas would join gold as a safe haven during these troubling times?

[winston]

"CHINDIA" IS GOING CRAZY FOR NATURAL GAS

Our next "Chindia" installment is a little cleaner than yesterday's…

Today's chart shows the huge growth in China and India's consumption of the "clean" hydrocarbon, natural gas. The fuel is used in the production of plastics and fertilizers, home heating and cooling, and to fire electrical power plants.

As you can see from our 30-year chart of natural gas consumption for both countries combined, Chindia is going wild for natural gas.

It takes sophisticated infrastructure – distribution pipes, compressors, and storage facilities – to use natural gas. So 25 years ago, Chindia used little of the fuel. But as the countries grew more prosperous, natural gas became (and will continue to be) a vital part of Chindia's energy supply… And this line will continue to head to the upper-right corner of this chart.

www.dailywealth.com

[winston]

On CNBC:-

There's an abundant of natural gas in the US and they are now going to export the LNG to Asia.

So how does one make money on this long term trend ?

Buy the Shippers ? Buy the Exporters ? Buy the Asian Importers ?

[iam802]

Not too sure where to file this...

--
Floating LNG Converters ‘Biggest New Thing,’ Teekay Chief Says

http://www.bloomberg.com/news/2010-12-1 ... -says.html

Liquefied-natural-gas tankers that can convert the liquid to gas onboard will be in increasing demand in the next 10 years as rising electricity production boosts consumption of the fuel, according to the head of North America’s largest LNG tanker owner.

“The biggest new thing in the LNG area is floating storage regas units,” Peter Evensen, chief executive officer of Hamilton, Bermuda-based Teekay LNG Partners, said in an interview yesterday. “These are ships that cater to a sudden need for gas for power.”

LNG is gas that’s cooled to a liquid for transport by ship to markets not connected by pipelines. Floating regasification tankers act as LNG import terminals. They can carry LNG to consuming areas, convert it back to gas and send it to local pipelines.

Teekay has identified 30 sites that in the next five years may require floating regasification tankers, including China, Brazil, Dubai, Kuwait, Bangladesh and some islands in Indonesia, said Evensen, who will become chief executive officer of Teekay Corp., Teekay LNG’s parent company, next year.

“That’s probably where you are going to see a lot of incremental traffic,” said Evensen. “We are also seeing more places that burn fuel oil start to switch over to gas.”

Teekay’s Fleet

There are currently about 15 LNG tankers in the world that can convert LNG to gas, according to Evensen. Teekay said in October that it has acquired a 50 percent interest in one such carrier. The company also owns 15 LNG tankers that don’t have regasification capability.

Evensen said he is pessimistic about the future of U.S. LNG exports because costs are higher than in other producing countries such as Qatar and because distances to gas consumers are longer.

“Gas has a great future in the U.S., but I don’t believe exporting gas from the U.S. has a great future,” said Evensen.

Companies including Cheniere Energy Inc., Freeport LNG Development and Macquarie Group Ltd. have said they are planning to build LNG export terminals in the lower 48 states.

“Today you have Qatar, Malaysia, and Indonesia exporting LNG, but the one that’s going to be huge in the future is Australia,” said Evensen. “There is going to be plenty of gas even before you take into account new LNG projects in Africa.

“If you talk about shipping distances, it’s clearly cheaper to bring gas from Australia, Papua New Guinea, Indonesia, or Malaysia to the big LNG import markets such as Japan, Korea and China.”

Natural gas for January delivery was little changed at $4.254 per million British thermal units at 9:14 a.m. on the New York Mercantile Exchange.

[kennynah]

LNG is not new.... Thailand adopted LNG on a massive scale for their taxis and private cars for years now.... and it's not all that very economical....

depending on the individual normal mileage, it can take up to 5 years to recoup the costs of installing a LNG engine in a car...and we all know that ageing cars give problems....so, by the time you get to enjoy the benefits of the lower LNG price, you might already have to sell off that car....

[winston]

CHART OF THE WEEK: BIG ACTION IN THE "CONTRARIAN'S COMMODITY"

Investing in the "contrarian's commodity" is getting a little better these days…

For the past 18 months, we've recommended taking a position in crude oil's clean cousin, natural gas.

Natural gas is used to make fertilizers and plastics, to heat and cool homes, and to fire electrical power plants.

New drilling technologies have brought on huge new supplies of the stuff… which produced a 66% decline in price from 2008 to 2009. This fall has made natural gas one of the few hated assets left in the world.

Over the past few years, "natty" has formed a hard price floor in the $3.50 to $4.00 area. This is the price level where producers start cutting production. (It's also a price where our preferred natural gas vehicles can pay distributions of 5%-7%.)

As our chart of the week displays, natural gas is getting a little less hated these days. After sinking below $4 in October, the fuel has rallied hard… and just broke out to a five-month high.


www.dailywealth.com