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Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

Gloomy Natural Gas Outlook

Adam Young of The Barricade sent me an email a few days ago linking to one of his articles.

Natural Gas Is Going to 1997 Levels and is Going to Stay There for A While


Now, Shale-gas companies may have been impaled on their own bayonets. Yet some would have us believe that natural gas prices are poised for a great comeback–that all the fret and worry is for nothing because prices are going to come right back up and justify the development of all the shale in the country, and then some.  They are wrong: demand will continue to be weak and supply will not be nearly as sparse as the some of the gas-bulls would have us believe.

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I believe that there is always a bull market in something but it may not be in natural gas in the short term. On the other hand the United States Natural Gas fund (UNG) has made a nice move but more follow through would be required to get traders excited.

Before you get too excited, Adam recently linked to another gloomy gas article - Commodities Roundup: Natural Gas