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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (16288)	7/7/2004 4:25:37 PM
From: Knighty Tin	Respond to of 110194

Darffot, You are right about the liquidity. NG contracts trade about 10% as much volume as crude. I don't have a problem with hedging current production. If you go way out and hedge 7 years ahead or something, I have a problem with that. How can they know their costs that far out? If a gas or oil co. sells this year's production and the price goes up during the course of the year, then when they deliver they can hedge next year's production at those new higher prices. Unless prices go straight up without interruption, the hedger makes out very well. Everyone seems to think the boom in NG is short term. I can see an intermediate correction coming, but longer term, where are you going to get energy at the prices we are paying today? And that's without any terrorist activity.