Monday, March 23, 2009

Natural Gas Below Cost of Production

Tom Dyson reports that Natural Gas is now below its cost of production - after having fallen all the way down to $3.50 at a recent low point (sitting currently at $4.31).

Dyson urges readers to "get long" now:

I expect the rise in gas prices is imminent. Gas prices track oil prices. Oil has risen 43% since Christmas. Gas has to catch up. Also, speculators have bet so heavily against natural gas prices, they're breaking historic records. Right now, speculators have huge positions against the commercials (or the actual fuel users). When speculators are all on the same side of the trade, a violent reversal is near.

"The Natty" has fallen upon tough times of late.


CRON said...

would you know of any composite resources that contain the marginal cost of production for natural gas, as well as energy, and if possible the softs and ags.

Brett Owens said...

Sorry I haven't found one yet - if anyone knows of anything, please drop a comment.

casamuels said...

Brett - any thoughts on Natural Gas...EIA reports are terribly bearish

Brett Owens said...

Personally I wouldn't touch it either way right now. If you forced me to choose, I'd go long, only because there's more potential upside than downside from here, I believe.

No doubt that Nat Gas could go lower in the short term here.

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