I have been watching Natural Gas for a while, Trinidad where I lived is a big producer. Like all producers they are suffering as the price continues to fall reaching below $2 yesterday. The way to invest I think is in an ETF and there are two possibles, UNG which is just a straight commodity play and FCG which tracks the companies that make gas. They are both down, the commodity much more than the producer. The reason is that supply is growing fater than demand.
I am not investing at this point and I don't think I would recommend it yet but I am researching this area, as its odd that oil is very high and predicted to rise further, but Natural gas is falling like a stone. Now one reason is that less businesses use NG, although many power stations are converting from coal. NG can run cars but the technology is ill understood and requires modifications to cars that are not popular (who really wants a high pressure tank in their trunk?), but most improtantly there is little supply available on roads. I think its likely that NG will be used more for power creation than vehicles, which will perhaps over time become electric using chargers such as Aerovironment makes.
I am not investing at this point and I don't think I would recommend it yet but I am researching this area, as its odd that oil is very high and predicted to rise further, but Natural gas is falling like a stone. Now one reason is that less businesses use NG, although many power stations are converting from coal. NG can run cars but the technology is ill understood and requires modifications to cars that are not popular (who really wants a high pressure tank in their trunk?), but most improtantly there is little supply available on roads. I think its likely that NG will be used more for power creation than vehicles, which will perhaps over time become electric using chargers such as Aerovironment makes.
No comments:
Post a Comment
Please leave me any comments. I look forward to replying.