will update the cdn. oil sand thread but thought would start this on natural gas.
long term natural gas prices should be in this range or higher. $6+. however most of the energy stocks I have mentioned have a certain exposure to natural gas. ECA, CNQ, ect.
natural gas has been very volatile the past year and even the last few weeks.
from a high over $12 to below $6. in the last few weeks has gone from below $6 to over $7, and now may be heading back to $6.
the hurricanes caused a spike in the price and at $12 we saw record production. however last winter in North America was much warmer than in the past.
due to weak demand because of weather and price. the amount of inventory is at high levels.
for high gas prices you want cold winters and hot summers (gas is used for heating and electricity).
if natural gas inventories keep rising from already high levels natural gas prices might collapse. below $4 maybe $3.
companies like ECA and CNQ are already cutting back on some drilling and if prices tanked by 50% production (supply) would quickly drop off, very hard to make money at $3 and $4 nat. gas. due to rising costs of drilling in North America.
this would probably only last a few months. and present a great buying opportunity, as the stocks would sell off.
this is a doomsday outcome, and may not happen. still energy holdings (esp. nat gas ) should be small until we know for sure.
note: own ECA and CNQ but about 25% of my orginal postions.
LNG will not play a role until 2008. long term nat. gas is a good investment since supply will go down and demand will rise (with economic growth); still want to avoid potential trouble in the next few months.
thanks
selkirk
long term natural gas prices should be in this range or higher. $6+. however most of the energy stocks I have mentioned have a certain exposure to natural gas. ECA, CNQ, ect.
natural gas has been very volatile the past year and even the last few weeks.
from a high over $12 to below $6. in the last few weeks has gone from below $6 to over $7, and now may be heading back to $6.
the hurricanes caused a spike in the price and at $12 we saw record production. however last winter in North America was much warmer than in the past.
due to weak demand because of weather and price. the amount of inventory is at high levels.
for high gas prices you want cold winters and hot summers (gas is used for heating and electricity).
if natural gas inventories keep rising from already high levels natural gas prices might collapse. below $4 maybe $3.
companies like ECA and CNQ are already cutting back on some drilling and if prices tanked by 50% production (supply) would quickly drop off, very hard to make money at $3 and $4 nat. gas. due to rising costs of drilling in North America.
this would probably only last a few months. and present a great buying opportunity, as the stocks would sell off.
this is a doomsday outcome, and may not happen. still energy holdings (esp. nat gas ) should be small until we know for sure.
note: own ECA and CNQ but about 25% of my orginal postions.
LNG will not play a role until 2008. long term nat. gas is a good investment since supply will go down and demand will rise (with economic growth); still want to avoid potential trouble in the next few months.
thanks
selkirk
