Am option for natural gas price increase

Top 40 natural gas producers as of QII/2013:

www.ngsa.org/download/Top 40 2013 2nd quarter.pdf

I'd look beyond CHK and XOM. CHK is nearly a pure play but it may take them a while to clean up their act post-McClendon, and XOM is so big and in so many businesses that they might not experience the gas-related pop you're looking for.

If you're not familiar with futures and the quirks of the NG ETFs, I'd stay away from them.
 
Quote from Maverick74:

Tom, I'm afraid what you are trying to do is much more complicated then it looks. Natty could rise substantially and your UNG won't go up a single penny. You really need to get into futures and study the forward curve. Natty has some seasonality quirks to it based on the summer and winter demand seasons vs the spring and fall supply gluts. The ETF does a terrible job managing this. I think you would be better off looking for stocks that will benefit from higher nat gas prices. CHK was mentioned. LNG is good one in lng space.
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Thank you and from reading the very sound advice given by you and the others I am for sure now going to forget about the UNG and instead concentrate on one of the two stocks that will benefit directly if I am correct in my feeling that natural gas prices are going to enter an uptrend from here out.

Thank you for you very sound advice and suggestions!
 
Quote from Brighton:

Top 40 natural gas producers as of QII/2013:

www.ngsa.org/download/Top 40 2013 2nd quarter.pdf

I'd look beyond CHK and XOM. CHK is nearly a pure play but it may take them a while to clean up their act post-McClendon, and XOM is so big and in so many businesses that they might not experience the gas-related pop you're looking for.

If you're not familiar with futures and the quirks of the NG ETFs, I'd stay away from them.
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Thank you for that very helpful link and since I am not familiar with futures and the quirks of the NG ETFs I now will alter my plan and instead concentrate on some call options on a few stocks that should benefit from an sustained upward price in natural gas..

Thanks for the link and for your advice !
 
Quote from justrading:

I've been looking at NG, good number line. But everyone is seeing the problems with a 6 month position.

Will it go up over the next 2 weeks? What is the 5 day number line telling you? If it's good, can you make money over the next couple of weeks? Take that, then see what's next, and if NG is not as good as CL or a short on GC, move on.

This business about a 6 month time frame in trading is like asking if my marriage will last forever. They didn't.
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What you said makes much sense to me and I will forget about the 6 month time frame I had originally considered......

I now will be buying some calls on a few stocks that will benefit from a price increase and keep my eye on them..

Thank you for your thorough input.
I appreciate it !
 
I don't really know the whole story with CHK except the beating they took.


As for XOM, I['ve always wanted that as a permanent holding after reading about it in Random Walk Down Wall Street. All the analysts say that XOM is the best "allocator" in the business. So yeah not a real gas play, more widows and orphans play.
 
Quote from Tom631:

Thank you and from reading the very sound advice given by you and the others I am for sure now going to forget about the UNG and instead concentrate on one of the two stocks that will benefit directly if I am correct in my feeling that natural gas prices are going to enter an uptrend from here out.

Thank you for you very sound advice and suggestions!
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I knew that all the talk about the world is flush with natural gas, and the US has entered independence from middle east energy, was just bull crap talk. If it were true, prices won't rise. So what happened to that talk?
 
Quote from tradingjournals:

I knew that all the talk about the world is flush with natural gas, and the US has entered independence from middle east energy, was just bull crap talk. If it were true, prices won't rise. So what happened to that talk?
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You do know that nat gas prices are driven by supply constraints right? Not world supplies. It's very expensive to store nat gas. It has to be used. It's not like oil. The world IS flush with natural gas. But it cost money to move through various pipelines and it's restricted by capacity issues and pipeline pressures. So THAT is the "talk". Any other questions?
 
Quote from Tom631:

What you said makes much sense to me and I will forget about the 6 month time frame I had originally considered......

I now will be buying some calls on a few stocks that will benefit from a price increase and keep my eye on them..

Thank you for your thorough input.
I appreciate it !
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Tom, I'm not sure buying long term calls is going to get what you want. The fact of the matter is, natural gas has to be traded, not invested in. There are some MLP's you can puchase that spit out the dividend cash flow from various pipeline companies. That might be your best bet. But there is a good chance if nat gas prices go higher that your nat gas stocks will drop and drop a lot. Just a little fyi.
 
Quote from Maverick74:

You do know that nat gas prices are driven by supply constraints right? Not world supplies. It's very expensive to store nat gas. It has to be used. It's not like oil. The world IS flush with natural gas. But it cost money to move through various pipelines and it's restricted by capacity issues and pipeline pressures. So THAT is the "talk". Any other questions?
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So your argument then is further proof that the world still depends on the middle east on energy, and the world is not flush in natural gas and oil.

You must be political savvy. Why there has been talk in recent times that the world has become independent of middle east energy? If it is true, then why would prices rise?

Where do sentences such as "As we become independent of middle east energy,.." and "As we are no longer dependent on middle east energy, ..." find their reality?

The man here who is ready to put his cash on line for a rise in the price is clearly more believable than the hot air from some people on TVs, or hot air from people who repeat words heard from others.
 
In any case I'd be inclined to check the correlation between NG price and share price.

Back in the day I had this oil stock, oil started going up so I expected to make a killing. Darned share price hardly moved. Later I discovered what made the difference for that particluar play was the refinery margin.

So much for my great idea.
 
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