NEW YORK ( TheStreet) -- I was talking Wednesday with Jim Cramer about natural gas, which has had a stellar run in price in the last several weeks, breaching the $4/mcf price twice.
While I have watched the price of natural gas rally from $3.50 to $4, I did not believe that it represented a structural change in what has been a depressed profile for nat gas. And while $4 is not a particularly high price for natural gas given its historical price over the last decade, I do believe we now have some structural reasons to believe that the bottom has been put in on natty.
I think that $4.50 natural gas is easily reached this summer and perhaps can go as high as $5/mcf by the end of the third quarter. The massive surplus of gas in storage has finally been whittled down from an enormous 800bcf to now be less than 50bcf -- and that may fall under the five-year average dependent upon the next storage report. Sequestering of gas, along with a mad dash of gas drillers to move to liquids has left little increasing production, save for in the Marcellus play.
And that's likely where you'd need to go for a good stock to play this nat gas move, although those names, including
Cabot Oil and Gas
have already rallied strongly.
I talk more about the nat gas opportunity with Jim in the video above.
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