Comments on: Implications of Cheap Natural Gas on Public Policy and Investing http://www.rationalwalk.com/?p=11563 Intelligent Investing is not a "Random Walk" Tue, 21 May 2013 23:36:00 +0000 hourly 1 http://wordpress.org/?v=3.5.1 By: Ravi Nagarajan http://www.rationalwalk.com/?p=11563&cpage=1#comment-1066 Ravi Nagarajan Sun, 06 Mar 2011 13:30:47 +0000 http://www.rationalwalk.com/?p=11563#comment-1066 It is true that the pricing difference could be narrowed either by a rise in natural gas prices, a drop in oil, or a combination of the two. To the extent that major substitution of natural gas for oil occurs, the slackening on the demand side in the US, if viewed in isolation, could potentially negatively impact the price of oil and increase the price of natural gas. However, the market for oil is international and with developing countries consuming more oil (with no end in sight), I don’t think any American drop in demand, which would be gradual, would impact oil prices negatively.

Ultimately speculation in commodities is not a good idea. However, it may be a good idea to have exposure to natural gas through a low cost producer, if held for the long run.

(Long Contango)

]]> By: Gaurav Sharma http://www.rationalwalk.com/?p=11563&cpage=1#comment-1065 Gaurav Sharma Sun, 06 Mar 2011 12:29:54 +0000 http://www.rationalwalk.com/?p=11563#comment-1065 My judgement from this is that its not easy to determine at this point if or when natural gas price will rise……but its easier to conclude that oil price would come down regardless of natural gas price rising

that would be a much better bet if you have to choose between the two.

I personally won’t make any such bet though.

]]>