Nat Gas Is Dead -- Long Live Nat Gas!

Are they lying or just stupid? That's what I think when I see oil down big. Once again, we took our cue from the oil inventories, which simply fluctuate in America week to week, but we never seem to factor in how unimportant we are.

Consider this: We have about a 4% decrease in driving year over year. If that's the marginal fact that influences oil, shouldn't we be down year over year with oil? Shouldn't oil be softer than last year, when we were driving more?

But the people who endlessly trade everything are so micro-focused that they never ask themselves how that can be.

It is why I always urge people to buy these stocks when they are ugliest, which tends to be on the Wednesday after a big inventory number.

Let me give you another heads up: natural gas is down because of an inventory build. Here's what you need to know, and I know it because I met with Spectra Energy (SE - commentary - Cramer's Take) last night and follow Williams and own El Paso (EP - commentary - Cramer's Take)for Action Alerts PLUS. We have increased storage for natural gas by about 10% year over year, but overall there is VERY LITTLE STORAGE SPACE for natural gas to begin with, so it doesn't really matter what the inventory numbers are. You catch five hot days, and that inventory is gone.

What matters is simply that natural gas has historically sold at a 6-to-1 ratio, and the longer the $130 price holds, the more obvious that natural gas is way too cheap. Now, natural gas is taking big share for homeowners right now, but there are still many places where we need more power plants to be built. Yesterday there was a classic article in the Metro section of The Washington Post that residents in Western Virginia -- coal country -- are fighting to keep a coal plant from being built. They want natural gas.

That's the issue right there. If the people in coal country won't build coal plants, if oil is so expensive, and if nuclear is pretty ridiculous as an alternative and solar is still not ready for prime time and wind only works where it is windy, there is only one alternative, the cheaper alternative -- natural gas.

So hold your nose and buy the usual suspects -- Devon (DVN - commentary - Cramer's Take), Ultra (UPC - commentary - Cramer's Take), El Paso, Apache (APA - commentary - Cramer's Take), Southwestern (SWN - commentary - Cramer's Take), Chesapeake (CHK - commentary - Cramer's Take) and Anadarko (APC - commentary - Cramer's Take) -- because they have all been endlessly hammered and are way, way too cheap.

Random musings: I simply don't believe that Chrysler's doing well as Cerberus says. But it doesn't matter: the company's private. It can easily stay rosy until it goes under.

At the time of publication, Cramer was long El Paso and Southwestern.

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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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