Comments on: Betting on Natural Gas – Part I http://youngandinvested.com/stocks-and-companies/betting-on-natural-gas-part-i/ THE hub for finance and investing insights from the new generation. Sun, 13 Jun 2010 22:30:47 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Shishir Nigam http://youngandinvested.com/stocks-and-companies/betting-on-natural-gas-part-i/comment-page-1/#comment-388 Shishir Nigam Sat, 31 Oct 2009 23:41:14 +0000 http://youngandinvested.com/?p=404#comment-388 Angelo, UNG is indeed broken, in fact any ETF that depends on rolling forward monthly future contracts in order to trace its index would be victim to similar problems - the premium to roll forward into next month's contract in a contango situation would detract from the ETF return. UNG of course can advance, in a situation where the price of natural gas shoots up enough to offset the cost of rolling contracts. The other scenario where UNG will benefit could be in a backwardation situation - when the following month's forward is cheaper than the current month. Angelo,

UNG is indeed broken, in fact any ETF that depends on rolling forward monthly future contracts in order to trace its index would be victim to similar problems – the premium to roll forward into next month’s contract in a contango situation would detract from the ETF return.

UNG of course can advance, in a situation where the price of natural gas shoots up enough to offset the cost of rolling contracts. The other scenario where UNG will benefit could be in a backwardation situation – when the following month’s forward is cheaper than the current month.

]]> By: Angelo http://youngandinvested.com/stocks-and-companies/betting-on-natural-gas-part-i/comment-page-1/#comment-379 Angelo Thu, 29 Oct 2009 21:53:52 +0000 http://youngandinvested.com/?p=404#comment-379 Well written. Do you think UNG is broken? If you look at the price just a year ago it was in the $30's now barely $11. Is that a matter of the regulators and or the change in strategy of issuing more shares? CAn UNG ever advance or is it better to buy DVN or CHK? Thoughts? Well written.
Do you think UNG is broken?
If you look at the price just a year ago it was in the $30’s now barely $11. Is that a matter of the regulators and or the change in strategy of issuing more shares? CAn UNG ever advance or is it better to buy DVN or CHK?
Thoughts?

]]> By: Shishir Nigam http://youngandinvested.com/stocks-and-companies/betting-on-natural-gas-part-i/comment-page-1/#comment-363 Shishir Nigam Sat, 24 Oct 2009 15:57:13 +0000 http://youngandinvested.com/?p=404#comment-363 Derrick, As I mentioned in the article, natural gas prices are restrained by distances because currently it is hard to transport natural gas across continents, unlike oil. As such the NG prices would be affected by localized demand and supply conditions. So while BRIC countries could well be pushing oil prices up, I don't see that effect coming into play for NG in the near term, or at least until LNG becomes a larger part of consumption. Likewise, regarding substitute energy fuels, I don't see them being effective substitutes in the near term. Far more efficient ways of harvesting energy from those alternatives will be needed before they can match the costs of using NG, per kWh. Thanks for the comment! Derrick,

As I mentioned in the article, natural gas prices are restrained by distances because currently it is hard to transport natural gas across continents, unlike oil. As such the NG prices would be affected by localized demand and supply conditions. So while BRIC countries could well be pushing oil prices up, I don’t see that effect coming into play for NG in the near term, or at least until LNG becomes a larger part of consumption.

Likewise, regarding substitute energy fuels, I don’t see them being effective substitutes in the near term. Far more efficient ways of harvesting energy from those alternatives will be needed before they can match the costs of using NG, per kWh.

Thanks for the comment!

]]> By: Daniel Eskin http://youngandinvested.com/stocks-and-companies/betting-on-natural-gas-part-i/comment-page-1/#comment-342 Daniel Eskin Fri, 16 Oct 2009 13:46:44 +0000 http://youngandinvested.com/?p=404#comment-342 Seems like a good value buy right now. Just in terms of energy I wonder when the world is going to be on BRIC's ass to cut down consumption of NG and pollution, so should be interesting to see how that plays out. Seems like a good value buy right now. Just in terms of energy I wonder when the world is going to be on BRIC’s ass to cut down consumption of NG and pollution, so should be interesting to see how that plays out.

]]> By: Derrick http://youngandinvested.com/stocks-and-companies/betting-on-natural-gas-part-i/comment-page-1/#comment-341 Derrick Fri, 16 Oct 2009 03:30:37 +0000 http://youngandinvested.com/?p=404#comment-341 Good article. I've been trading HND and HNU quite often. What are your thoughts on the effects of cleaner energy substitutes (i.e. hydro, methanol) and its affect on Nat Gas? There's some correlation with Nat Gas & Crude prices...seems to be an upward trend. Also, lots of demand from BRIC countries pushing prices upward. Good article. I’ve been trading HND and HNU quite often. What are your thoughts on the effects of cleaner energy substitutes (i.e. hydro, methanol) and its affect on Nat Gas?

There’s some correlation with Nat Gas & Crude prices…seems to be an upward trend. Also, lots of demand from BRIC countries pushing prices upward.

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