Monday, June 8, 2009

The Natural Gas Dilemma

The natural gas price has been severely hammered since peaking last summer above $13.5 per thousand cubic feet. It now trades at $3.935. I decided to make a pilot purchase of the natural gas ETF (symbol UNG) this morning at $14.2092/share for the following reasons:
-it currently trades at a price very low to the last six years
-despite the fact that we currently have greatly increased our proven natural gas reserves and have seen decreased demand, I believe that it will be a significant resource for our country for many years to come
-natural gas is currently trading very low relative to oil prices.
-when this administration wakes up to the "green-ness" of this fossil fuel relative to oil and coal, it will be placed at the forefront of our energy plan (ask T. Boone about this).

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