{"id":39496,"date":"2013-06-30T22:52:44","date_gmt":"2013-07-01T02:52:44","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=39496"},"modified":"2013-06-30T22:52:44","modified_gmt":"2013-07-01T02:52:44","slug":"natural-gas-stocks-are-about-to-reprise-an-all-star-performance","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/06\/30\/natural-gas-stocks-are-about-to-reprise-an-all-star-performance\/","title":{"rendered":"Natural Gas Stocks are About to Reprise an All-Star Performance"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a> <\/p>\n

Everyone likes a good comeback story where large obstacles are overcome on the way to a favourable outcome.<\/p>\n

And we’re about to see one in the investment world…<\/p>\n

The shale gas boom seemed to be a disaster for the natural gas industry as the price of natural gas <\/strong>plummeted over a five-tear period to reach a multi-year low below $2 per million BTU in April 2012.<\/p>\n

But as Money Morning<\/em> Global Energy Strategist Dr. Kent Moors forecast, natural gas prices have rebounded with a vengeance since then. The price has more doubled (trading at about $3.80 now) since that bottom last spring, becoming this year’s top performing commodity. Nat gas hit a 20-month high of $4.43 per million BTU in April.<\/p>\n

That trend of steady to rising prices is likely to continue thanks to increasing demand.<\/p>\n

These factors, often pointed out by Moors, include the switchover by utilities from coal-fired power to gas-fired power, the start of exports soon of liquefied natural gas<\/a>, and increased demand from industries such as the chemical industry.<\/p>\n

And the trend is huge news for natural gas stocks<\/strong>, and their investors – especially when you look at what happened nearly 10 years ago…<\/p>\n

Natural Gas Stocks in 2013<\/h2>\n<\/p>\n

First, let’s look at what has happened to natural gas stocks this year.<\/p>\n

Logic would dictate that the last year or so has been a great time to be invested into natural gas stocks.<\/p>\n

In the past few years, many natural gas companies have reduced their costs while keeping production in check in order to stay viable in a tough market environment.<\/p>\n

This has put a good number of them in a position of strength to benefit from the higher natural gas prices we’ve seen in 2013.<\/p>\n

The companies that are poised to benefit the most are those with the lowest cost of production and that are leveraged to the price of natural gas.<\/p>\n

Robert Mark, oil and gas analyst for Canadian firm MacDougall, MacDougall & MacTier, told the Globe & Mail<\/em> ’Companies that have been producing profits over the past two years<\/em> [when selling prices have been low] have proven their worth and are attractive investments.<\/em>‘<\/p>\n

But the market is rarely logical. Despite the most sustained upward move in natural gas prices<\/strong> in over 10 years, the shares of most gas companies have yet to embark on a sustained move upward.<\/p>\n

The Market Rhymes<\/h2>\n<\/p>\n

But we’ve seen this movie before. . .<\/p>\n

As Mark Twain said, ‘History doesn’t repeat itself, but it does rhyme.<\/em>‘<\/p>\n

In this specific case, the ‘rhyme’ goes back to 2001-2002.<\/p>\n

At that time, natural gas prices also tanked to below $2 per million BTU. Then over the next several years, prices more than doubled to over $4. Just as it has now, with the difference being the current rebound happened in a shorter time frame.<\/p>\n

Yet, as now, the stocks of natural gas companies just sat there.<\/p>\n

But eventually these stocks did move higher…and in a big way.<\/p>\n

Over the next two years, natural gas companies soared in excess of 200%, a true comeback story!<\/p>\n

In effect, sooner or later, the stocks of natural gas firms have to follow prices higher.<\/p>\n

That should apply in the current market <\/a>environment as well.<\/p>\n

Tony Daltorio
\n Contributing Editor, Money Morning<\/em><\/strong><\/p>\n

This article first appeared in the US <\/em>Money Morning<\/em><\/a> on 27 June, 2013<\/em><\/p>\n

Join Money Morning on Google+<\/u><\/a><\/strong><\/p>\n

From the Archives…<\/em><\/strong><\/p>\n

Why Your Financial Advisor Won’t Like This Investment Advice…<\/a>
\n28-06-2013 –  Kris Sayce <\/p>\n

Is This Your Last Chance to Sell Before the Stock Market Sinks?<\/a>
\n27-06-2013 – Murray Dawes <\/p>\n

Is This the Ultimate Contrarian Opportunity…Or a Death Wish?<\/a>
\n26-06-2013 – Dr Alex Cowie <\/p>\n

How Central Bank Zombies Control the Stock Market<\/a>
\n25-06-2013 – Dr Alex Cowie <\/p>\n

Why The ‘Asia-Zone’ Crisis Makes Australian Stocks a Buy…<\/a>
\n24-06-2013 – Kris Sayce <\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au Everyone likes a good comeback story where large obstacles are overcome on the way to a favourable outcome. And we’re about to see one in the investment world… The shale gas boom seemed to be a disaster for the natural gas industry as the price of natural gas plummeted over a five-tear period … <\/p>\n

Continue reading “Natural Gas Stocks are About to Reprise an All-Star Performance”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-39496","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/39496","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=39496"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/39496\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=39496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=39496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=39496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}