This Day On The Street
Continue to site
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

[video] Dicker and Link: Natural Gas Trades Over $6

NEW YORK (TheStreet) -- Eek! Natural gas now costs $6 per thousand cubic feet, a price not seen since briefly in 2010. Meanwhile, crude oil is trading well above $100 a barrel. There are going to be some unhappy consumers when they open their fuel bills this month.

Even more disheartening, I believe the relatively high price of both natural gas and crude oil are here to stay for 2014.

In natural gas, a steadily difficult winter has continued to drop stockpiles well below the five-year average. We are currently sitting at less than 1.5 trillion cubic feet in storage. With another cold snap of any kind before the spring, or even with an early onset of hot weather in May, we could see lifetime-low stockpiles of close to 1 trillion cubic feet.

Furthermore, American exploration and production companies have worked hard in the past two years to shut down production of dry gas assets, preferring to concentrate on shale oil and NGL production. It will be difficult to ramp up production for gas anytime soon.

Finally, there's nothing like the trader shark tank of natural gas once it gets running. I remember often from my on-the-floor days seeing natural gas rocket upwards with very little catalyst except the "hot trade" idea of the week. It is a classic counter-intuitive move to see natural gas trade today above $6/mcf precisely on the day that snow is rapidly melting here in the northeast and temps are expected to be in the 50s for the upcoming weekend.

Natural gas stocks, however, haven't much participated in the parabolic rise of the underlying futures, or at least they haven't yet. Buying opportunities still exist in dedicated natural gas producers in the Marcellus, such as EQT Corp. (EQT - Get Report), and in the Fayetteville shale, such as Southwestern Energy (SWN - Get Report).

Must Read: [video] Quick Take: Coffee Prices Surge as Brazil Crops Are Hurt by Dry Weather

I talk more about the natural gas move with Stephanie Link in the video above.

At the time of publication the author had no position in any of the stocks mentioned but owns backmonth natural gas futures. Action Alerts PLUS is long CVX.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.

Dan is currently President of MercBloc LLC, a wealth management firm and is the author of "Oil's Endless Bid," published in March of 2011 by John Wiley and Sons.

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
EQT $69.53 -0.04%
SWN $11.79 -3.04%
AAPL $92.72 -0.56%
FB $119.49 1.43%
GOOG $711.12 1.38%


Chart of I:DJI
DOW 17,740.63 +79.92 0.45%
S&P 500 2,057.14 +6.51 0.32%
NASDAQ 4,736.1550 +19.0610 0.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs