Someone asked me a month or two ago about Natural Gas, and I said don’t buy
until it gets down around $2.00 mmBTU-it was about $2.85 when they asked me….well, it was at $2.20 today
UNG still looks to be selling off….I would wait
a little longer or watch for a sudden reversal….need a confirmation
of the recent low.
By the way, does anyone besides me
believe we are about to experience one of the hottest spring and summer
seasons ever in North America? Today, we had record-breaking Temps over
80 F in Chicago….unheard of for mid-March in these parts! There is no
snow cover to deflect the sun’s rays….the ground is yellow and parched
which absorbs heat and is building heat in the ground which creates a
buffer of hot air close to the surface of the earth.
Our winter was also one of the most unusually mild ones! (visit AccuWeather.com for more information on this phenomenon)
spare capacity in the electrical grid system rests mostly with gas
turbine power plants which are powered up on hot summer days….this
could be the thing that eventually turns up the usage of natural gas? (Also, should oil remain high in price, some factories have the ability to switch to cheaper nat gas, as do some vehicles, which could help lift nat gas prices)…
Also, these conditions can lead to parched ground and dry river beds!
This is what happened to the center of our country during the Great Depression’s Dust Bowl….similar pattern setting up now!
could also lead to a drain of fresh water sources…..one stock I have
mentioned in the past continues to get dumped, but recently, some
institutional buying came into the stock to absorb about 3% of the
float….that’s not a lot, but it says that someone is looking ahead.
One thing I learned over the years is that many stock traders are lousy
weather forecasters….before nat gas was sloshing around, I use to
often make money trading the weather in advance on nat gas stocks…
the economics behind the desalination pumps of ERII do not always make
economic sense, but if the price and availability of fresh water is
about to jump higher, then ERII might suddenly make sense!
The Chinese aren’t waiting! They just completed a major desalination plant over there, and they plan to add more!