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Natural gas $1.63

Near lowest in 25 years.

Please list best suggestions on how to play Nat Gas.

Comments

  • edited February 15
    I'm probably not going to be very useful but if you're looking to invest in the commodity there is this from Investopedia Top Natural Gas ETFs for 2023

    Aside from that I have held an investment in EPD for about 10 years now. EPD is one of the largest Midstream Oil and Gas companies in North America.

    Good luck with your research.
  • For whatever reason, my energy companies (natgas) are all shooting the moon quite nicely today .. EPD, WMB, ETRN, FLNG. (I've not heard any news, though.....)

    I trade natgas thru pipelines (which often have most of the income as fee-based 'tolls' so they're kind of insulated from commodity prices) and FLNG is a LNG shipper with long-term contracts locked in, which protects them from the spot price volatility of LNG transport.

    There are some other natgas pipelines / refiners / E&P firms that are attractive, but I am already very long this sector already.
  • Ted Oakley of Oxbow was recently interviewed, and when asked to address the energy sector, he cited EPD and Williams among his choices. I gathered these were not recent purchases of his, but long-held positions).

    there are several gas-heavy producers. I guess it depends on what exactly you wish to bet on: do you want to be that NG will increase in price -- which would tend to favor most gassy producers, to the extent they do not engage in significant hedging activities. I've tended to avoid gas-heavy producers. Instead, I tend to favor mixed- or oil-heavy producers. I've always viewed EOG as a best-in-class producer, though at the moment, my only energy exposure is XOM and CVX. If you are agnostic on individual companies just consider XOP or XLE.

    OTOH, if you want to bet that NG stays low, ask yourself: "who benefits from low NG prices?". At least one answer to that question is many of the chemical companies. Depending on their output, natural gas represents THE major input cost to create many of the chemicals which these companies produce/sell. Lower input costs mean fatter profit margins. The chemical industry is very cyclical/volatile. Probably the 'safe choice' here would be Dow Chemical which presently has divd yield just below5%. Value Line assesses Dow's financial strength as "A:".
    I have no opinion, nor any direct holding in any chemical company at the present time.
  • beebee
    edited February 25
    @Edmond
    At least one answer to that question is many of the chemical companies. Depending on their output, natural gas represents THE major input cost to create many of the chemicals which these companies produce/sell. Lower input costs mean fatter profit margins. The chemical industry is very cyclical/volatile. Probably the 'safe choice' here would be Dow Chemical which presently has divd yield just below5%. Value Line assesses Dow's financial strength as "A:".
    I have no opinion, nor any direct holding in any chemical company at the present time.
    FSCHX might be a consideration, though Dow is not part of its top 10 holdings.
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