Tommaso, I agree with you on the likely running out of gas scenario for this winter.
The questions are what happens, i.e. industrial curtailments, what is the inventory at which supply distruptions start due to lowered pipeline pressure, how high can spot prices go, what is the effect on E&P and OSX stock prices, what is the impact on an already severely weakened economy.
Also, what are the effects of the high drilling & workover rig count on increasing supply, how much pent up demand is there in ammonia, methanol, aluminum, NGL, etc.production that has been curtailed, what will the effect on demamd be of all the new gas fired power generation.
Lots of variables, and a strong case to buy natural gas E&Ps. But what I worry about more is the state of the whole market, and the combined effects of possible inflation and sky high energy prices on stock prices.
I still have some E&Ps and royalty trusts, but I think cash is the place to be so I'm hoping to unload into strength brought on by the cold weather and inventory crisis. Some speculative puts on tech can also spice up your portfolio, but puts are getting very expensive which is another sign of the end of the bull.
Sharp |
