And just last month, he (Chanos) discussed his bearish stance on ExxonMobil: "ExxonMobil will not be able to replace its reserves."Source: DailyWealth
You see, ExxonMobil isn't the only one having trouble replacing reserves. Almost every large-cap integrated oil company from Royal Dutch Shell to Chevron is in the same boat. After all, it's getting more difficult to find large amounts of oil these days.
That's why these oil companies are spending billions of dollars on natural gas assets in some of the most prominent shale areas across the U.S
With the Natty in the tank, but forming a strong base (and just above the cost of production to boot), this could be an interesting speculation from here. The potential downside is limited, and the upside could be a 2x or 3x in fairly short order, as Curzio points out.
Now that's some cheap Natty. (Source: StockCharts.com)
But if you're inclined to pick up some exposure to natural gas, DO NOT go long natural gas ETF UNG. In the same DailyWealth piece, Brian Hunt referred to UNG as "The World's Worst ETF" - ready why here.
3 comments:
Outside of UNG and natural gas futures, if you wanted to get exposure in natural gas where would you invest your money?
I think you have to consider the nat gas producers in that case - they're going to be levered on the price of nat gas (good news if it's going up!)
Information is pretty good and impressed me a lot. This article is quite in-depth and gives a good overview of the topic.
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