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Clean Energy Fuels Corp. Message Board

  • only_true_guru only_true_guru Nov 21, 2012 9:40 PM Flag

    A Possible Developing Negative

    Natural Gas Futures are at $3.91, a multi year high.

    The higher NG, the less profit CLNE can make. CLNE's profit is a function of the difference between Gasoline and Natural Gas. At the pump, if gasoline prices equals NG, there will be less trucking companies switching to NG. NG trucks cost more than Diesel trucks. As the pump difference narrows there is less incentive to convert.

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    • Another risk is the ability for the major pipelines to deliver the natural gas on a reliable basis. If the weather turns cold in a hurry, there will be spike in pipeline demand for gas for heating homes and businesses, leading to choking off capacity for gas stations.

    • you now almost zero about clne
      most contracts they get a % of the price they pay for ng
      the higher the price the more they get
      it is usually between 25 and 35%

      • 1 Reply to rbtsherman
      • Robert

        I'll reword my statement so even you can understand it. The important metric is the difference between Gasoline at the pump and Natural Gas at the pump.

        'If the pump price of Natural Gas exceeds the pump price of gasoline for a meaningful length of time, CLNE is out-of-business.' There is no way trucking companies will order NG vehicles under those circumstances. The competitor trucking company who did not switch could bid a lower price to transport goods.

        Therfore if the price of Natural Gas rises and the price of Gasoline falls it becomes a negative because trucking companies will feel more comfortable staying with gasoline. If the opposite happens where the difference between gasoline at the pump is greater then $3 more than natural Gas, every trucking company will run, not walk, to buy Natural Gas vehicles and CLNE's earnings will eventually soar.

        Tonight the future price of NG is unchanged while gasoline futures are down 2.15 cents. If this trend continues where the spread is narrowing, there is a growing problem.

        Ignore that SPREAD variable if you want.

    • Remember though, eventually NG will rule because of the great domestic supply. It truly is "endlesss" at least figuratively. NG will always out-produce oil. It's getting easier and easier every day. All that has been done will not be un-done.

      Sentiment: Strong Buy

4.84+0.46(+10.50%)Dec 17 4:00 PMEST

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