Wt Nat Gas 2x Discussion Threads

[pbracken] 18/3/2010 14:36

Chunky intra-day fall. Picked up a few for 84.5 cents. Mad, really.

[andrewbaker] 15/3/2010 14:08

LNGA changes daily by 2x the price of DJ-UBS Natural Gas Sub-IndexSM (before fees and adjustments).

[mart] 13/3/2010 16:52

Just put an interesting Oil Drum article URL on the GAS thread.

[dextroisomerism] 13/3/2010 12:10

AndrewBaker - very good advice, thankyou. The article cited in post 421, implies that although gas will be increasingly used in the future and that although the price will go up in the longterm, for the near future the price will remain low. From the excellent posts on this thread, I understand that LNGA is effectively a short term investment for the time that gas is rising in price. Does it only take into account the US price of natural gas?

[andrewbaker] 11/3/2010 18:06

Don't think how can this go any lower: it can, and it will. Buying this because it's too cheap is not a good idea. Natural gas futures do not behave like an unloved stock that has value but it's not recognised in the price. And the leverage makes it even worse as a punt. Steer clear until a real trend reversal occurs and a new uptrend is established.

[wig123] 11/3/2010 12:42

11/03 12:38 - CERA Week: Natural Gas Industry Looks To Shore Up Demand

(This article was originally published Wednesday.)


By Jason Womack
Of DOW JONES NEWSWIRES

HOUSTON (Dow Jones)--The natural gas industry is grappling with a big problem: trying to find an outlet for vast new supplies of the fuel.

The boom in domestic natural-gas production from onshore natural-gas fields known as shales has dominated much of the discussion at the IHS Cambridge Energy Research Associates conference. And while many industry executives and experts agree that a global economic recovery will eventually lead to the long-term demand growth needed to absorb excess supply, near-term demand remains stunted.

"We need to be better about the facts and hopefully, over time, that will build more support for gas," said Helge Lund, president and chief executive of Statoil ASA (STO), which is investing billions in U.S. shale-gas development.

Over the course of the conference, executives have promoted the fuel as a secure and robust domestic energy source that provides a low-carbon alternative to other fossil fuels, and they encouraged attendees to do the same.

"It's a no-brainer," Steven Farris, chief executive of Apache Corp. (APA), said during a panel discussion at which he advocated wider use of natural gas as a transportation fuel. "I truly believe that we are going to use more natural gas in this country."

The pressure to peddle the commodity comes after the economic downturn undermined demand - particularly among industrial users, which account for about a third of domestic consumption. Prices have plunged more than 65% from their 2008 summer highs above $13 a million British thermal units.

However, some see price volatility falling away as producers continue to tap new fields and secure low-cost supplies that will compete more effectively against coal, a staple fuel source for electricity generation in the U.S.

"We should expect relatively low prices for the long term," Chad Deaton, chief executive of oilfield-services provider Baker Hughes Inc. (BHI).

Still, Deaton said during a panel discussion that industry participants--from those developing technology to producers, to utilities--need to agree on a pricing framework to make the economics of the business work.


-By Jason Womack, Dow Jones Newswires; [e-mail]


Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: You can use this link on the day this article is published and the following day.


(END) Dow Jones Newswires

March 11, 2010 07:38 ET (12:38 GMT)

[indigo85] 11/3/2010 10:13

This must be due a bounce..? Good for 1.4 soon, I'm thinking.

[andrewbaker] 08/3/2010 19:36

It's not just contango, and probably that is not the biggest drag on the price: it is the 2x leverage on a daily basis that hits the price over a longer period. That is why this security is not to be held for any length of time. Any price fall in the underlying commodity price that is tracked means a bigger rise is required just to get back to par: see the example above in post number 393.

[pbracken] 08/3/2010 17:28

Apologies EasyGlider - I meant a dollar. I've edited the post accordingly.

Ian: you're right - LNGA is not an investment; it's a warrant on the short term variation in the price of NG. Time it well and it can be a game changer; get it wrong and it can kill you....

[ian chapple] 08/3/2010 17:13

PB I see the US weather pushing the price down for the next few days before the temps drop again. The key is to get in just before the uptick and out again before the contango bites. I shorted successfully but was a bit early getting out.

[easyglider] 08/3/2010 15:09

PB, dont you mean hovering around a Dollar...

But yes I agree, a huge lesson in Contango...

[pbracken] 08/3/2010 12:18

If anyone wants a lesson in the effects of the contango, look at this:

Natural gas was 250 cents when LNGA hit 110c (ish) last August; today, gas is trading at 456 cents, and LNGA is hovering around a dollar.

The question, of course, is where is gas going in the short term? IHNFI.

[wig123] 08/3/2010 11:15

Nothing short of robbery the retail price of gas considering wholesale market.





08/03 11:09 - E.ON UK To Cut Gas Prices 6% From March 31 - uSwitch

LONDON (Dow Jones)--The U.K. arm of German utility E.ON AG (EOAN.XE) will cut its natural gas tariff by 6% from March 31, saving the average customer GBP47 a year, said price monitoring service uSwitch.com Monday.

E.ON U.K. is the third supplier to cut prices, following Scottish and Southern Energy PLC (SSE.LN) and the retail arm of Centrica PLC (CNA.LN).

"Now that three of the big six have moved we can also see a clear trend emerging with gas price cuts coming in at around 5%, or GBP40," said Ann Robinson, director of consumer policy at uSwitch.com. "This won't make up the ground lost two years ago when suppliers increased prices by 42%, or GBP381."

[dextroisomerism] 06/3/2010 09:55

I have just read this message board for the first time. It was a pleasure to read the intellectual and technical analysis of this stock. It made a welcome change from the childish drivel usually encountered.

[wig123] 04/3/2010 18:11

WTF happened here? only just seen sp, hmmm! let's see if the 600k buyer stays put for a fill at 1 could be some serious upside, but will it be after further downside?

[wig123] 02/3/2010 16:18

at this rate I will be switching from Kerosene to LPG , they will be giving gas away soon!


Still not to inspired to go long yet.

[andrewbaker] 26/2/2010 12:12

This is still on a downtrend.

[wig123] 26/2/2010 11:38

Getting twitchy here, bit of support onL2 at 1.1 but the 600k at 1 has been persistant!

[gaz125] 26/2/2010 09:37

Wig - you're probably right but I bought back in this morning....good chance of some upside soon imho.

[wig123] 25/2/2010 15:32

entry point looming, although could be a tad more downside yet!!

[ian chapple] 23/2/2010 16:17

The short SNGA is another way to play this game. If you watch the weather in the USA you get a rough idea on the likely trend for gas. The very cold waves crossing the country over the last few weeks have held the price up because of demand and reduced amounts in store. The temperatures have recently gone back nearer normal, hence the fall in price. If you look at SNGA it went up by about 15%. The current position looks a little less volatile so I expect to see prices move less, although the contango will ratchet the long down slowly.
Does anyone know what T Bone Pickens is doing about popularising gas for transport?

[wig123] 23/2/2010 13:53

Agreed, if theres anything I have learnt over the last few years its cutting the losses a bit quicker and not fighting the trend.


Still struggling to hang on to the winners though and ride them that bit higher.

[andrewbaker] 23/2/2010 13:50

This last week holding on cost me, and against what I told myself to do. No-one is immune to disliking taking a loss, but sometimes it's the only thing to do.

[wig123] 23/2/2010 13:39

Hmmm!, I got in to early at current share price only to average down around 1.10 then exited up around 1.3 or thereabouts, so I am hand sitting now and try to avoid that 1st early buy in.

Hell of a drop the last week or so, just wonder when the shorts will close!

[andrewbaker] 23/2/2010 13:24

wig123 -

Your last two comments I considered putting in my post above. Probably very wise on both counts.