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Natural Gas

Below is a follow up to the Boone Pickens article I posted yesterday. Its an article by Bob Marcin.

Robert Marcin
Natural Gas
8/7/2008 11:18 AM EDT

I am sticking with my positive bias towards natural gas despite its retracement and abandonment by many market observers. Earlier this year I warned about the ramping growth rate in domestic production. That is still the case. But nat gas still has enough positive factors supporting it.

First, it is dirt cheap versus oil. Secondly, there is a shortage of fuel globally for power and transportation. I expect nat gas demand to grow rapidly on a global basis. Thirdly, LNG continues to find better pricing and demand abroad, it’s not a threat. Finally, domestic demand remains strong, especially from electricity generators as they pan coal. All these things continue to suport the healthy growth in supply.

We have not had much go right for nat gas bulls, and that has led to a $9 price. But once we get into inventory rebuild season, things should improve. If the Pickens plan get traction, Katy bar the door. Currently nat gas can be used to replace gasoline at around $2.00 per gallon equivalent retail. I am trying to buy a nat gas fired Honda. This nat gas thing will be huge if we start driving with the stuff!