Natural Gas: The Best Risk-Adjusted Commodity Speculation
Source: Seeking Alpha, The Sovereign Society (5/7/09)
". . .bargain hunters buying natural gas at today's bombed-out levels could probably double their money in under a year."
The odds are pretty good that bargain hunters buying natural gas at today's bombed-out levels could probably double their money in under a year.
All thanks to the fact that we could soon be facing rising industrial demand and the possibility of supply outages caused by the looming hurricane season. Not to mention that demand typically rises during the summer as individuals turn up the air conditioning.
There's no doubt about it; the best risk-adjusted speculation now for commodities investors is natural gas. There's no other commodity that's this cheap, this battered and this oversold.
From its high in July of last year, spot natural gas prices have now collapsed a cumulative 74%. In 2009, prices have declined 37%. Crude oil—on the other hand—has been driven higher by big supply cuts by OPEC and Russia earlier this year, seeing prices rise 19% to $53 a barrel.
Over the last several months, natural gas has been hammered as the global economy suffers its worst recession since 1981-1982 coupled with soaring gas inventories. Though an extremely volatile commodity, natural gas at these levels has historically been a strong speculation following big bear market crashes.
It's time to ride natural gas.