No place to put the oil and plenty of places to put natural gas to keep the price above $5, including the power plants that keep us warm!
What a change of pace. What a switch! We had become conditioned to believe that natural gas could only go down because of the glut and an inability to store it, so any rise in
seemed mistaken, and the stocks have been disappointing of late.
We had become conditioned to believe that the endless rally in oil would produce bountiful results for the oils that are more levered, like
, but more importantly the drillers, particularly the
and the manufacturers like
National Oilwell Varco
Now we are changing perceptions right before our eyes.
Of course, this market needs the oil and gold futures up because of the commoditization trade, so all gains or losses in equities remain hostage to the larger commodity picture. But it is shocking to see the switch in the commodity prices and trajectories.
Aubrey McClendon, CEO of Chesapeake, has been saying not to bet against the natural gas companies here and not to believe that pricing is stuck in the $4s, although he's not offering a price range publicly that I have seen.
He's looking right, right now. I would believe we would see an end-of-year rally in the nat-gas names at this pace. They have been winners for the most part (except
), so you might want to consider that this group could rally. I would focus on Ultra, Apache and Southwestern as the big markup plays if some mutual fund or hedge fund wants to show that they saw the rally in natural gas coming.
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