Energy & Nat Gas Prices To Increase in 2011: Reports
Bullish 2011 investment trends, from various sources. Most are bullish to wildly bullish on small cap, energy, agriculture and tech sectors.
Saxo Bank even sees natural gas increasing a stunning 50% in 2011! Would do wonders for lease bonuses and drilling, to say nothing of royalites.
Most see higher energy prices across the board (gas, oil, coal), higher grain prices (especially corn, soy, and wheat), very attractive economics in the energy and ag sectors, more merger and acquisition activity which helps put a floor under stock prices,and substantial share buybacks supporting shareholder value.
See Dec 26th post:
http://www.lsgifund.com/index_files/Page960.htm
2011 should be a knockout year for the energy sector, and the ag sector also. Would be nice.
Views: 113
Replies to This Discussion
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Permalink Reply by JeffNParis on -
Pull-out from the above-mentioned report:
"Natural Gas Surges 50 Percent—Natural gas enters 2011 with a supply surplus as the global downturn has resulted in supply exceeding demand for two years “ resulting in two years of double digit losses. But heading into 2011 the fundamentals for Henry Hub improve dramatically. Increased industrial demand on a US recovery, historical cheapness relative to crude and coal, forward curve flattening and action on proposals to export more US natural gas (OTCBB:UNGS) reserves all combine to make passive investments in gas more profit- able. And the icing “ an unusually frigid cold snap leads to a rapid depletion of stocks. Henry Hub thus sees a one-in-25 year move up by 50% in 2011."
I like.
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Permalink Reply by ken hatcher on
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Do not quit your day job.
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Permalink Reply by Les Bamburg on -
Wilma, I would love to see prices increase but the realist in me says look to 2nd half of 2012 for some improvement in natural gas prices. The US is still in an gas oversupply situation and we need some time for us to get back in balance.
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Permalink Reply by Wilma Watts on
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I'm not so sure things will change quicker than you think. Gulf of Mexico drilling is down big time, and the nat gas wells in the Gulf decline like shale wells. More and more capital expenditures are going to oily plays versus the gassey plays, so rigs and fracing equipment will be diverted to oily plays. Costs of fracing keep going up so gassey plays look less and less viable at $4 mcf gas. And coal keeps getting more and more expensive so coal to gas switching is going on bigtime in the utility sector, lots of gas plants generate kilowatts on a very competitive basis. Plus the joker, they say hurricane season will be active in 2011, at least some long term forecasters (I put no faith in their outlook, but hey, they are professionals). And the winter should be normal cold wise.
We will see. I think the pessimists are a bit too overdone.
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Permalink Reply by benny688 on
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Yes, it would be nice and will probably keep inching upwards, but I think it will be at least several years before we have the infrastructure to use up the surplus.
The spectacular lease bonuses of spring 2008 are no more.
I agree with ken in that we need to keep our day jobs and wait it out.
GLTA
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Permalink Reply by Amigo 2 on
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Been there, where everything was coming up roses with no -----thorns and guess what it stopped almost in its tracks so-----be very careful on what you spend. Follow the advice of knowing that you have the money before you spend it. Easy come --easy go; however, I do not feel that this has been easy come because I have gotten very little but it was more than I had yesterday. Does anyone know why when oil goes up gas comes down?
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Permalink Reply by Les Bamburg on
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Amigo, US natural gas prices have no relationship to crude oil prices since they no longer compete for the same markets.
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Permalink Reply by FXEF on
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Natural Gas: $4.48 / MfcCrude Oil: $88.49 /bbl1 boe = 5.8 Mcf gasWouldn't natural gas have to be $15.25 / Mfc to be priced equal to the equivalent of crude oil?
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Permalink Reply by Les Bamburg on
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FXEF, yes - that is the reason one would say that natural gas in your example is at 29% crude parity.
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GeoResources (GEOI), player in the Eagle Ford and Bakken shales, was initiated as a buy yesterday - the stock has done very well lately. Some comments on energy investing and a couple of firms with a niche - Evolution Petroleum (EPM) domestic oil production (Louisiana) and FX Energy (Polish natural gas producer) (FXEN) - are in the January 6 Thursday commentary:
http://www.lsgifund.com/index_files/Page960.htm
Some neat slides from the companies on CO2 injection (EPM) and economics, and Polish structures that FXEN tends to drill (hopefully the structures will be packed with natural gas or oil). They also talk about GEOI a bit in the blog. These guys are also apparently high on the ag sector and farmland:
http://www.agnetwork.com/High-Prices-Fuel-Bullish-Ag-Sector-Outlook...
The sweetspot would be if you have a farm and lease the minerals for a horizontal test well that finds crude oil and liquids, ha ha.
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