This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Commodities That Could Heat Up in 2011

Natural Gas

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Contrarians are betting that 2011 might be the year natural gas prices could explode , because there really is no way to go but up.

Natural gas prices have been depressed in the last couple of years in the U.S. as a result of significant spare capacity and slowing demand. But with natural gas companies switching their focus to crude oil, there could be some draw in production notes Dicker. Meanwhile demand for natural gas is slowly but surely increasing.

Most analysts remain bearish, but natural gas prices have already started showing signs of life in recent months. "I strongly and sharply disagree with most of the analysts' expectations for continued depressed pricing for gas during 2011. When the first real turnarounds of demand begin to show themselves, the price will quickly (and illogically) completely outstrip the admittedly huge inventories of gas in storage. It may not make sense, but I've seen it too many times in the past to expect anything different this time around," Dicker wrote in a recent article for TheStreet.

James Dailey of Team Asset Strategy says U.S. natural gas producers could benefit from import demand for liquefied natural gas, or LNG, from India and China. Currently, the U.S. has limited export capacity for LNG but that could change. "In 2012 and 2013, significant export capacity for LNG will come on stream. India and China have a supply deficit," said Dailey. "The U.S. finally has something to export," he quipped.

How to Trade

Rather than take exposure to ETFs such as United States Natural Gas (UNG), analysts recommend exposure to natural gas plays such as EOG Resources (EOG), Chesapeake Energy (CHK - Get Report), Devon Energy (DVN - Get Report), Cheniere Energy (LNG) and Canada's top natural gas producer Encana (ECA).

Cheniere is currently seeking DOE approval to export LNG from Sabine Pass in Louisiana to all countries that have LNG import capacity. Regulations allow the Energy Department to block shipments to countries other than those that have a free trade pact with U.S. if it deems exports are against public interest.
3 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CHK $10.77 0.00%
DVN $57.87 0.00%
FCX $18.40 0.00%
GLD $111.76 0.00%
POT $30.99 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs