Fire Up the Natural Gas Stocks

If we had added a huge amount of storage capacity for natural gas, then I would be concerned that natural gas prices were never going to go back up again and probably were headed down further.

But we haven't added storage capacity, which is what makes me so bullish on the group. Don't take my word for it. In an article tellingly headed "As Natural Gas Glut Looms, Producers Eye the Weather," the Washington Post this morning quotes John Dearborn, global energy vice president from Dow Chemical (DOW - commentary - Cramer's Take), the biggest buyer of nat gas in the country, as saying, "If we have a warm summer and a normal-to-colder winter we will find ourselves back in the position we were in last winter."

I think that the natural gas group must be bought on every downturn because it is forecasting another warm winter and a cool summer. That's a one-two combo that the percentages don't favor.

The risk?

I would feel differently if there were more storage built, enough storage so inventories would still be high after a cold winter or a warm summer. But we haven't had that. That's why the Dow Chem guy is right. I would also feel differently if we were allowed to drill offshore in the U.S., where there is enough natural gas to heat all the homes in the U.S. for 80 years, according to the Interior Department. But Congress said no to repealing the drilling ban.

That's why the stocks are right. They are pulling back here. I would buy them right here.

Oh, and did I mention how hot it is today, at least in New York?

At the time of publication, Cramer had no positions in the stock mentioned.

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