Wt Nat Gas 2x Discussion Threads

[h101] 03/9/2009 11:57

jotoha - yes, and no - because of the nature of the leveraging.

[mart] 03/9/2009 11:29

Adopt a 2-3 year hold strategy?

[bottompicker] 03/9/2009 11:20

Theres also a problem with contango. The future price of gas is much higher, so at the end of every period (is it month?) the ETF has to buy next months gas at a higher price, so if the gas price stays the same, this ETF looses money.

The moral is... to buy this when its going to pop. Holding it for a while could seriously damage your wealth.

[jotoha2] 03/9/2009 10:52

Looking at the chart of lnga versus henry hub spot which was $12 last july and lnga was around $80 , yet the drop has been far more severe with lnga , is this because of the leverage , and is it likely to follow an up trend by the same margin??

[gdasinv2] 03/9/2009 09:36

if any one can provide any further article on LNGA would be good. Thanks

[gdasinv2] 03/9/2009 07:44

Nice artcile, But certainly this is ever bootom price to divesify and pockect some cheap NG shares for the future rise at some point - winter on way so speculation....

[perfect choice] 03/9/2009 07:35

Possible light at the end of the tunnel for those prepared to wait? Taken from the weekly oilbarrel.com newsletter I receive so not primary source.
--------------------------------------------------------------------
OILBARREL.COM NEWSLETTER
---------------------------------------------------------------------

KBC Market Services, financial services group does what it calls a Weekly Oil Comment. There are usually some good and useful things in it but it is often marred for me by the authors’ attempts to be flippant and funny and not succeeding. This week’s offering is a case in point.

It says that while crude oil prices continue to benefit from the anticipation of economic recovery, US natural gas prices have been in freefall. The Nymex Henry Hub contract hit its lowest level in more than seven years â€" US$ 2.72 per million Btu (British thermal unit) â€" although it has since recovered to US$3.20/MMBtu. This equates to around just under
US$4 a thousand cubic feet by my reckoning or US$17.92 a barrel of oil equivalent versus a crude price of US$72.50 a barrel, according to KBC.
The economics of lifting gas onshore the US are entirely different to bringing up oil is some frontier offshore region, so the price comparison is not entirely relevant.

Nevertheless, the figures start off an interesting train of thought. In recent years at least 40 Australian companies have set up in the US to take advantage of sky high gas prices (US$10 a thousand cubic feet at one point), by developing marginal gas fields which did not pass the “materiality threshold” of the oil explorers who discovered them. This is to say the fields were too small or too difficult to be worth exploiting when prices were low. These companies include Antares Energy, Samson Oil & Gas, Amadeus Energy, Salinas Energy to name a few.

A number of London listed companies like Empyrean, Meridian, and Nighthawk also got into gas in the US (Nighthawk has since graduated to oil in the US in a big way).

These companies will be familiar to readers of oilbarrel.com and these readers will interested to learn how such groups are faring in these difficult times.

KBC goes on to say the glutted US natural gas market might eventually find relief from that old soldier Major Winter. Some meteorologists think the coming winter in the US could be the coldest in more than a decade.
Apparently there are similarities between today’s weather patterns and those seen ahead of the harsh winter of 2002-03. Much like this year, that winter began with more than comfortable gas inventories of 3.2 trillion cubic feet, but ended with stocks at a panicky 642 billion cubic feet. If a repeat of 2002-03 really is in the offing, the US may need every molecule of gas it can find.

Well, meteorologists can be wrong and often are, as we in the UK know very well after enduring a miserable summer which the weather forecasters said would be a sizzler. But this is all interesting analysis and rumination from KBC.

However KBC then goes on to spoil it by saying: “More particularly, surely today’s spot natural gas price represents an extraordinary buying opportunity. ( KBC Market Services takes no responsibility for this last statement. Investors are reminded that prices can go down as well as up etc. etc. etc.) “Very droll. Well if it does not want to take responsibility for such a remark it should not make it.

[gdasinv2] 03/9/2009 07:29

is the LNGA customer are only in US ? If worldwide people buying from same places - then winter is on way , I would imagin this is the bottom. I have diversified LNGA at this level , the lowest share price all time, below this probbaly the mnafactures will not supply as because of the Cost, it is not always inventory. Any thought?

[redprince] 02/9/2009 14:23

Re: the record gas inventories in US-could be several months b4 it turns and that would cost you big.Then again... when it goes it will be quick.

[jotoha2] 02/9/2009 13:56

I belief its now building a base, any change in weather in and around GOM then she will fly , also if the economy has turned in the states as some say , that should give a boost , but it will be rapid when it happens .

[gconvery] 02/9/2009 13:50

So where is the bottom on this....can it go any lower??

[redprince] 29/8/2009 15:49

check out iii thread for some other very informative posts on this particular commodity.

[stewart3268] 29/8/2009 13:21

H101,

Thanks very much for your time.

[h101] 29/8/2009 10:14

stewart3268, have a look on this thread here:


Also there is more detail here and later:

If you want, read AndrewBaker's posts on that thread before 169.

Hope this helps.

[stewart3268] 29/8/2009 09:23

H101,

I would be grateful if someone could explain more, it stands to reason that as it is leveraged then it will move higher or lower than the % movement of natural gas howver it must be linked to the selling price of natural gas which is why when the price rose late Thursday and Friday morning why did we not see this move more, at close it was still well up on Thurday but this was down.

TIA

[h101] 28/8/2009 22:01

It goes down because of the way leveraged ETFs work.

[stewart3268] 28/8/2009 16:03

Stange gas went up yesterday and it still goes down, what the hell is wrong with this stock, it should react to Natural gas prices, I think it was $2.72 yesterday

[thelongandtheshortandthetall] 28/8/2009 06:49

is maximoney still about.

be good if we could get a gas price chart in the header.

[pbracken] 27/8/2009 19:49

Intraday price capitualtion (to $2.70 mbtu) has rebounded to end virtually flat on the day. Interesting.

[redprince] 27/8/2009 15:22

US reserves are extremely high and will take months for those to reduce if demand does reignite in winter.Cant see demand and supply forcing price up in a hurry here- am told the contango curve on these are very steep at the moment
so timing is everything here.

Definitely one to watch for now-agreed massive upside potential however that could be some months off yet.

[h101] 27/8/2009 12:11

Still doesn't look right to get in, from this chart at least - log scale 15 and 50 day MAs. When the price crosses the 15 and the 50 I guess I'll be convinced.

[bottompicker] 27/8/2009 12:02

looks sort of obvious doesnt it? Lets see how it pans out.

[thelongandtheshortandthetall] 27/8/2009 09:13

got few of these yesterday.
the plan is: cold weather to start approching in the western developed world and industry to start using gas again at increasing levels as ressesion abates and global activity rises.

good luck all
thelong

[babylon3] 24/8/2009 13:38

In profit already