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Dan Dicker

Dan Dicker

Dan Dicker is a 25 year veteran of the New York Mercantile Exchange where he traded crude oil, natural gas, unleaded gasoline and heating oil…

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Why You Should Have Some NatGas In Your Portfolio

I know, I know – all the sexy in the energy world right now is in Oil – what with the latest OPEC ‘arrangement’ on quotas and the ramping up on stock prices of oil companies, particularly in the Permian basin. I’m trying to find a place to add to positions in oil myself, if only the oil market would lose a bit of the excitement from a lousy print over $50. Fifty? That’s not a rally – and the prices we’re seeing on Wall Street Permian darlings like Pioneer Resources (PXD) and Concho (CXO) are way ahead of $50 oil.

But natural gas – that continues to call me towards it. It’s not sexy, for sure – no big surprise announcements of concerted effort to control supply, nor a big hot new play that’s got everyone ready to spend money on virtually any acreage, dry or not. But the numbers keep pouring in, making natural gas look like the real opportunity heading into the late fall and winter, not oil.

Let’s start simple, with supply:

 

(Click to enlarge)

What could be simpler than this? Natural gas production is turning downwards for the first time in 4 years and significantly downwards for the first time in more than ten.

(Click to enlarge)

On the other side of supply is demand, where power generation from natural gas has not stopped growing, despite the slowing supply.

For the commodity itself, the chart looks equally dull – since the big run…




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