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Message: Re: Good article
1
Aug 28, 2008 08:58PM

Take note of the following excerpt:

"...a barrel of light crude oil supplies six times the energy of a million cubic feet of natural gas. Typically, prices for the two fuels have moved roughly in tandem, with a barrel of oil costing about eight times more than a million cubic feet of gas.

Now, crude oil futures are trading 14 times higher than the natural gas contract – a yawning gap that reflects the tight supply-demand fundamentals and higher political risk in the global oil markets, and the more balanced natural gas market, which is essentially North American in scope.

“There is this disconnect between the two prices compared to what historically has been the case,” said Greg Stringham, vice-president with the Canadian Association of Petroleum Producers"

Eventually the "disconnect" referred to above may equalize and NG, with North America converting more and oil supplies declining - NG should rise back up. So for oil say at $120 per barrel, historical price for NG could easily go to $15. This is why QEC and any other solid NG producer has a rosy future IMO. Ignore the daily flucuations and hold long.

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Aug 29, 2008 07:00AM
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