Investors like to examine pricing anomalies, particularly related to commodities that could be viewed as substitutes but trade at radically different prices. One barrel of crude oil has approximately six times the energy content of one thousand cubic feet (mcf) of natural gas. One mcf of natural gas is approximately equivalent to one million BTUs (MBTU). Despite the energy equivalence, for a variety of reasons, the pricing relationship between oil and natural gas is almost never exactly six to one. Read this article for our analysis.
T. Boone Pickens made headlines in 2008 with his “Pickens Plan” for American energy independence. The plan, which consisted of a combination of wind farms and greater use of natural gas, was unveiled as crude oil prices reached an all time peak. At the time, natural gas prices were also reaching record highs. Both crude oil and natural gas prices plummeted as the severity of the recession became apparent. Read this article for details on Mr. Pickens’ plan.
As oil prices escalated to nearly $150 one year ago, T. Boone Pickens appeared on CNBC to explain his proposals for energy independence. At the time, Mr. Pickens certainly did not predict the huge collapse in oil prices in the ensuing months, but appears adamant that his plan is still viable today. Let’s listen to what Mr.Pickens had to say in an interview today on CNBC.